Competing Auctions of Skills

Research output: Working paperResearch

The model of competing sellers McAfee (1993) is applied to a labor market environment with heterogeneous workers, who differ by outside option and skill type, and heterogeneous firms, who differ by the amount of output produced when matched to each possible worker tyoe. We derive both a static and a dynamic version of this model where workers can entertain offers while employed and unemployed. A simple estimated benchmark version of the dynamic model gives a reasonable approximation of the statistical moments of both the aggregate wage and productivity distribution in Denmark. We also use the simple benchmark model to explore further implications of the theory. For example, we find that observed inter-temporal changes in the overall distribution of wages are not predicted by a simple model of no-comparative advantage.
Original languageEnglish
Place of PublicationKbh.
PublisherCentre for Applied Microeconometrics. Department of Economics, University of Copenhagen
Number of pages54
Publication statusPublished - 2014
SeriesCAM working papers
Number01
Volume2014

Bibliographical note

JEL Classification: J64; J63; E32

    Research areas

  • Faculty of Social Sciences - Competing auctions, on-the-job search, heterogeneous firms, skills, supermodularity, non-degenerate job offer distribution

ID: 101008811