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Title: Explaining labor wedge trends: an equilibrium search approach
Authors: Quintero Rojas, Coralia A.
Langot, François
Issue Date: 2016
Publisher: European Association for Comparative Economic Studies (EACES)
Università Carlo Cattaneo - LIUC
Bibliographic citation: Quintero Rojas Coralia A., Langot François (2016), Explaining labor wedge trends: an equilibrium search approach. In: The European Journal of Comparative Economics, vol. 13, n. 1, 2016, p. 3-35. E-ISSN 1824-2979.
Abstract: In this paper, we present a search and matching model of the labor market and use this as a device to explain the long-run variation in the aggregate hours worked in several OECD countries over the period 1980-2013. The model distinguishes between hours worked per employee (intensive margin) and the employment rate (extensive margin) and includes a tax/benefit system. This allows us to assess the impact of the observed time-varying heterogeneity of taxes, unemployment benefits, and workers' bargaining power on the two margins. Our method is based on an accounting procedure. Once it has been calibrated, we find that, for the ten countries of the sample, our search economy is able to explain the patterns of the two margins of aggregate hours worked over the 1980-2013 period, when it includes the cross-country heterogeneity of the labor market institutions.
Journal/Book: The European journal of comparative economics
Appears in Collections:EJCE

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