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Scale effects in markets with search

Petrongolo, Barbara and Pissarides, Christopher (2002) Scale effects in markets with search. . Centre for Economic Policy Research, London, UK.

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Reduced-form tests of scale effects in markets with search, run when aggregate matching functions are estimated, may miss important scale effects at the micro level, because of the reactions of job searchers. A semi-structural model is developed and estimated on a British sample, testing for scale effects on the offer arrival rate and the wage offer distribution. When contrasting London with the rest of the country we find scale effects in wage offers. The larger market delivers higher realized wages and not more matches, however, because the scale effects on matches are offset by the response of reservation wages.

Item Type: Monograph (Discussion Paper)
Official URL:
Additional Information: © 2002 Barbara Petrongolo and Christopher Pissarides
Divisions: Centre for Economic Performance
Subjects: H Social Sciences > HD Industries. Land use. Labor
JEL classification: J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies > J64 - Unemployment: Models, Duration, Incidence, and Job Search
J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure; Wage Differentials by Skill, Training, Occupation, etc.
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D83 - Search; Learning; Information and Knowledge; Communication; Belief
Date Deposited: 04 Jun 2008 10:39
Last Modified: 03 Dec 2020 00:05

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