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Title: Compensating Wage Differentials in Stable Job Matching Equilibrium

Citation Type: Miscellaneous

Publication Year: 2012

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Abstract: This paper studies a stable job matching equilibrium and the implicit pricing of non-wage job characteristics. It departs from the previous literature by allowing worker heterogeneity in productivity instead of preferences, giving rise to a double transaction problem in a hedonic model. We show explicitly how wage differences across jobs can be decomposed into compensating wage differentials for non-wage job characteristics and differences in worker productivity. We also derive sufficient conditions for an assortative job matching and a stable matching condition in a model with continuous agent types. Empirical evidence fromthe U.S. Census and job amenity data from the Dictionary of Occupational Titles strongly supports our theory.

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Authors: Yamaguchi, Shintaro; Han, Seungjin

Publisher: McMaster University

Data Collections: IPUMS USA

Topics: Other

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