Wages, unemployment and inequality with heterogeneous firms and workers:

"In this paper we develop a multi-sector general equilibrium model of firm heterogeneity, worker heterogeneity and labor market frictions. We characterize the distributions of employment, unemployment, wages and income within and between sectors as a function of structural parameters. We find t...

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Bibliographic Details
Main Authors: Helpman, Elhanan 1946- (Author), Itskhoki, Oleg 1983- (Author), Redding, Stephen 1972- (Author)
Format: Book
Language:English
Published: Cambridge, Mass. National Bureau of Economic Research 2008
Series:Working paper series / National Bureau of Economic Research 14122
Online Access:Volltext
Summary:"In this paper we develop a multi-sector general equilibrium model of firm heterogeneity, worker heterogeneity and labor market frictions. We characterize the distributions of employment, unemployment, wages and income within and between sectors as a function of structural parameters. We find that greater firm heterogeneity increases unemployment, wage inequality and income inequality, whereas greater worker heterogeneity has ambiguous effects. We also find that labor market frictions have non-monotonic effects on aggregate unemployment and inequality through within- and between-sector components. Finally, high-ability workers have the lowest unemployment rates but the greatest wage inequality, and income inequality is lowest for intermediate ability. Although these results are interesting in their own right, the main contribution of the paper is in providing a framework for analyzing these types of issues"--National Bureau of Economic Research web site
Physical Description:61 S. graph. Darst. 22 cm

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