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A structural dynamic analysis of job turnover and the costs associated with moving to another job

Research output: Contribution to journalArticle

Original languageEnglish
Pages (from-to)1116-1133
Number of pages18
JournalEconomic Journal
Volume102
Issue number414
DatePublished - 1992

Abstract

This paper analyses the labour market behaviour of employed individuals using a structural on-the-job model. The model allows for nonzero costs associated with moving to another job. By using a data set which provides abundant information on the labour market environment of employed individuals the structural parameters of interest can be estimated. The on-the-job search model specification is discussed. The conditions under which the optimal strategy of an employed individual has the reservation wage property are examined. Section II contains a description of the data and the empirical implementation of the model. An estimation method that identifies the parameters of interest without having to make assumptions about the class of wage offer distributions is developed. Section III presents the main results. The robustness of the results with respect to various sources of misspecification of the model is also briefly examined. Section IV concludes. -from Author

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