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Measuring labor market frictions: A cross-country comparison

Research output: Contribution to journalArticle

Original languageEnglish
Pages (from-to)224-244
Number of pages21
JournalJournal of the European Economic Association
Volume1
Issue number1
DOIs
DatePublished - Mar 2003

Abstract

In this paper we define and estimate measures of labor 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 United States of America, the United Kingdom, 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.

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