Search equilibrium and social and private returns to education

Holzner, Christian; Launov, Andrey

doi:10.1016/j.euroecorev.2009.04.002

Cited by 13 publications

(14 citation statements)

References 27 publications

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“…The resulting skill-specific wage offer distributions H i have no holes (connected support) and the reservation wage (of skill group i) is the lower bound of the wage offer distribution (of skill group i) as in the standard model. Excluding mass points, Holzner and Launov (2010) are able to derive an analytical form for the wage offer distribution. They show that depending on the degree of homogeneity of the production function, the model generates increasing or decreasing skill-specific wage offer densities h ij .…”

Section: Production Functions and Marginal Productivitymentioning

confidence: 99%

“…32 It is to be noted that the objective function given here is not equal to the expected profit because of the non-linearity of the production function. It can be justified, however, by a second order Taylor approximation (Holzner and Launov 2010). 33 The incentive to pay a higher wage is the reason why mass points cannot exist in the homogeneous model.…”

Section: Production Functions and Marginal Productivitymentioning

confidence: 99%

“…There are not many models performing such a task. One such model with several production factors linked over a production function will be discussed below and is due to Holzner and Launov (2010).…”

Section: Production Functions and Marginal Productivitymentioning

confidence: 99%

“…An extension of the baseline model to a production function with several skill groups i, each of size q i with q i = N, and heterogeneous production technologies as indexed by j is due to Holzner and Launov (2010). Note, that this is the most general model discussed in this paper: it allows for differences between firms employing different technologies and for differences in workers that vary in productivity a priori, depending on their use.…”

Section: Production Functions and Marginal Productivitymentioning

confidence: 99%

“…Holzner and Launov (2010) assume complementarity between the production factors (supermodularity) in the production function y j . This guarantees, provided a continuous distribution, that (type j) firms cover exactly the same position in the wage offer distribution of each skill group.…”

Section: Production Functions and Marginal Productivitymentioning

confidence: 99%

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Mindestlöhne, Lohndispersion und Arbeitslosigkeit in Suchmodellen. Ein Überblick

Garloff¹

2010

ZAF

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu Abstract Facing the recent German debate on the minimum wage, this paper analyses theoretical effects of minimum wages on employment and wage distribution under a frictional setting. I review new developments in search theory and discuss the influence of the minimum wage on wages and employment under each setting. Therefore, a major theoretical focus of the paper is the integration of heterogeneity on both sides of the market in equilibrium search models. In frictional models, minimum wages are generally binding and redistribute rents from firms to workers. Employment effects are more diverse. In the homogeneous case where workers and firms are identical, minimum wages do not affect employment, while in the heterogenous case theoretical results are mixed. There is no unique connection between unemployment and minimum wages, and the effect can be negative, zero or even positive. A positive effect can arise from a reaction in labor supply. However, the most advanced models, integrating heterogeneity on both sides of the market, seem to support the hypothesis that an increase in the minimum wage generally leads to an increase in unemployment as well. In this case, a social planner faces a trade off between redistribution of rents and unemployment. Terms of use: Documents in Keywords Search friction · Labor market transitions · Wages JEL classification E24 · J21 · J31 · J64A. A. Garloff (u) IAB Hessen, Saonestrasse 2-4, 60528 Frankfurt a.M., Germany e-mail: Alfred.garloff@iab.

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Section: Production Functions and Marginal Productivitymentioning

confidence: 99%

Section: Production Functions and Marginal Productivitymentioning

confidence: 99%

Section: Production Functions and Marginal Productivitymentioning

confidence: 99%

Section: Production Functions and Marginal Productivitymentioning

confidence: 99%

Section: Production Functions and Marginal Productivitymentioning

confidence: 99%

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