Working Paper: CEPR ID: DP3978
Authors: Geert Ridder; Gerard J. van den Berg
Abstract: In this Paper we define and estimate measures of labour market frictions using data on job durations. We compare different estimation methods and different types of data. We propose and apply an unconditional inference method that can be applied to aggregate duration data. It does not require wage data, it is invariant to the way in which wages are determined, and it allows workers to care about other job characteristics. The empirical analysis focuses on France, but we perform separate analyses for the USA, the UK, Germany and the Netherlands. We quantify the monopsony power due to search frictions and we examine the policy effects of the minimum wage, unemployment benefits and search frictions.
Keywords: cross-country comparisons; job search; labour market policy; minimum wage; mobility; monopsony power; search frictions and wages
JEL Codes: J63; J64; J31; J38
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Labor market policies (minimum wage laws) (J48) | Monopsony power (J42) |
| Policies aimed at reducing frictions (O24) | Monopsony power (J42) |
| Estimated index of search frictions (D83) | Average number of job offers a worker receives (J63) |
| Search frictions (J69) | Monopsony power (J42) |