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Can the Mortensen-Pissarides Model with Productivity Changes Explain U.S. Wage Inequality?

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15 Scopus citations

Abstract

This article examines whether the Mortensen-Pissarides matching model with productivity changes can explain the time pattern of wage inequality. The main finding is that the model produces counterfactual results. The main source of failure seems to be the exogenous matching function and/or the exogenous surplus share, neither of which allows firms to use wage policies to direct workers' searches.

Original languageEnglish
Pages (from-to)70-105
Number of pages36
JournalJournal of Labor Economics
Volume21
Issue number1
DOIs
StatePublished - Jan 2003

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