IDEAS home Printed from https://ideas.repec.org/p/cwl/cwldpp/2396.html
   My bibliography  Save this paper

Labor Market Matching, Wages, and Amenities

Author

Listed:
  • Thibaut Lamadon

    (University of Chicago)

  • Jeremy Lise

    (Cornell University)

  • Costas Meghir

    (Yale University)

  • Jean-Marc Robin

    (Sciences Po)

Abstract

This paper develops the nonparametric identification of models with production complementarities, worker-firm specific disutility of labor and search frictions. Mobility in the model is subject to preference shocks, and we assume that firms can write wage contracts. We develop a constructive proof for the nonparametric identification of the model primitives from matched employer-employee data. We use the estimated model to decompose the sources of wage dispersion into worker heterogeneity, compensating differentials, and search frictions that generate between-firm and within-firm dispersion. We find that compensating differentials are substantial on average, but the contribution differs greatly between the lowest and highest types of workers. Finally, we use the model to provide an economic interpretation of several empirical regularities.

Suggested Citation

  • Thibaut Lamadon & Jeremy Lise & Costas Meghir & Jean-Marc Robin, 2024. "Labor Market Matching, Wages, and Amenities," Cowles Foundation Discussion Papers 2396, Cowles Foundation for Research in Economics, Yale University.
    • Handle: RePEc:cwl:cwldpp:2396
    as

    Download full text from publisher

    File URL: https://cowles.yale.edu/sites/default/files/2024-07/d2396_0.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Morchio, Iacopo & Moser, Christian, 2018. "The Gender Pay Gap: Micro Sources and Macro Consequences," MPRA Paper 99276, University Library of Munich, Germany, revised 24 Mar 2020.
    2. Stéphane Bonhomme & Kerstin Holzheu & Thibaut Lamadon & Elena Manresa & Magne Mogstad & Bradley Setzler, 2023. "How Much Should We Trust Estimates of Firm Effects and Worker Sorting?," Journal of Labor Economics, University of Chicago Press, vol. 41(2), pages 291-322.
    3. Stéphane Bonhomme & Thibaut Lamadon & Elena Manresa, 2019. "A Distributional Framework for Matched Employer Employee Data," Econometrica, Econometric Society, vol. 87(3), pages 699-739, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Escudero, Veronica & Liepmann, Hannah & Vergara, Damian, 2024. "Directed Search, Wages, and Non-wage Amenities: Evidence from an Online Job Board," IZA Discussion Papers 17211, Institute of Labor Economics (IZA).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fanfani, Bernardo, 2022. "Tastes for discrimination in monopsonistic labour markets," Labour Economics, Elsevier, vol. 75(C).
    2. Jason Sockin, 2022. "Show Me the Amenity: Are Higher-Paying Firms Better All Around?," CESifo Working Paper Series 9842, CESifo.
    3. Arellano-Bover, Jaime & San, Shmuel, 2023. "The Role of Firms and Job Mobility in the Assimilation of Immigrants: Former Soviet Union Jews in Israel 1990–2019," IZA Discussion Papers 16389, Institute of Labor Economics (IZA).
    4. Christopher Neilson & Federico Huneeus & Conrad Miller & Seth Zimmerman, 2021. "Firm Sorting, College Major, and the Gender Earnings Gap," Working Papers 649, Princeton University, Department of Economics, Industrial Relations Section..
    5. Federico Huneeus & Kory Kroft & Kevin Lim, 2021. "Earnings Inequality in Production Networks," NBER Working Papers 28424, National Bureau of Economic Research, Inc.
    6. Engbom, Niklas & Moser, Christian & Sauermann, Jan, 2023. "Firm pay dynamics," Journal of Econometrics, Elsevier, vol. 233(2), pages 396-423.
    7. Arellano-Bover, Jaime & Saltiel, Fernando, 2021. "Differences in On-the-Job Learning across Firms," IZA Discussion Papers 14473, Institute of Labor Economics (IZA).
    8. Thibaut Lamadon & Magne Mogstad & Bradley Setzler, 2022. "Imperfect Competition, Compensating Differentials, and Rent Sharing in the US Labor Market," American Economic Review, American Economic Association, vol. 112(1), pages 169-212, January.
    9. Vanessa Alviarez & Keith Head & Thierry Mayer, 2025. "Global Giants and Local Stars: How Changes in Brand Ownership Affect Competition," American Economic Journal: Microeconomics, American Economic Association, vol. 17(1), pages 389-434, February.
    10. Stéphane Bonhomme, 2021. "Selection on Welfare Gains: Experimental Evidence from Electricity Plan Choice," Working Papers 2021-15, Becker Friedman Institute for Research In Economics.
    11. Morchio, Iacopo & Moser, Christian, 2018. "The Gender Pay Gap: Micro Sources and Macro Consequences," MPRA Paper 99276, University Library of Munich, Germany, revised 24 Mar 2020.
    12. Pauline Corblet, 2022. "Returns to education and experience on the labor market : a matching perspective [Les rendements de l'éducation et de l'expérience sur le marché du travail : offre, demande et appariement]," SciencePo Working papers Main tel-03852824, HAL.
    13. Paul Brandily & Camille Hémet & Clément Malgouyres, 2022. "Understanding the Reallocation of Displaced Workers to Firms," Working Papers halshs-03082302, HAL.
    14. Bertay, Ata & Carreño Bustos, José & Huizinga, Harry & Uras, Burak & Vellekoop, N., 2022. "Technological Change and the Finance Wage Premium," Discussion Paper 2022-002, Tilburg University, Center for Economic Research.
    15. Peeters, Thomas & van Ours, Jan C., 2022. "International Assortative Matching in the European Labor Market," IZA Discussion Papers 15521, Institute of Labor Economics (IZA).
    16. Annaïg Morin, 2023. "Workplace heterogeneity and wage inequality in Denmark," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 38(1), pages 123-133, January.
    17. Bertay, Ata & Carreño Bustos, José & Huizinga, Harry & Uras, Burak & Vellekoop, N., 2022. "Technological Change and the Finance Wage Premium," Other publications TiSEM e3543110-e75d-4749-b4ee-2, Tilburg University, School of Economics and Management.
    18. Rosario Aldunate & Gabriela Contreras & Matías Tapia, 2020. "Labor Earnings Dispersion in Chile: Decomposition, Dynamics and the Role of Firms," Working Papers Central Bank of Chile 892, Central Bank of Chile.
    19. Lachowska, Marta & Mas, Alexandre & Saggio, Raffaele & Woodbury, Stephen A., 2023. "Do firm effects drift? Evidence from Washington administrative data," Journal of Econometrics, Elsevier, vol. 233(2), pages 375-395.
    20. Demirci, Murat & Kırdar, Murat Güray, 2023. "The labor market integration of Syrian refugees in Turkey," World Development, Elsevier, vol. 162(C).

    More about this item

    JEL classification:

    • A00 - General Economics and Teaching - - General - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cwl:cwldpp:2396. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Brittany Ladd (email available below). General contact details of provider: https://edirc.repec.org/data/cowleus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.