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Semi-nonparametric estimation of an equilibrium search model

Research output: Contribution to journalArticle

Original languageEnglish
Pages (from-to)327-349
Number of pages23
JournalOxford Bulletin of Economics and Statistics
Volume62
Issue number3
DatePublished - Jul 2000

Abstract

We specify and estimate an equilibrium job search model with productivity differences across labour market segments. The model allows for two types of unemployment: frictional unemployment due to search frictions and structural unemployment due to wage floors. Wage floors exist because of high unemployment benefits or binding minimum wages. The productivity distribution is estimated semi-nonparametrically along the lines of Gallant-Nychka, using Hermite series approximation. We decompose the total unemployment rate and we examine the effects of changes in the minimum wage.

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