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Title: Estimating a Structural Search Model: The Transition from School to Work
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Wolpin, Kenneth I. |
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Estimating a Structural Search Model: The Transition from School to Work Econometrica 55,4 (July 1987): 801-818. Also: http://www.jstor.org/stable/1911030 Cohort(s): NLSY79 Publisher: Blackwell Publishing, Inc. => Wiley Online Keyword(s): Job Search; Modeling; Unemployment; Wages, Reservation This paper presents a job search model that is econometrically implemented using all the restrictions that are implied by job search theory, and it provides a statistical test of those restrictions. The usefulness of this approach is that it provides a check on the internal consistency of the model as revealed by the data; i.e., one can verify the extent to which the internal logic of the theory misrepresents the data. The most interesting experiment is related to the impact of a change in the offer probability schedule on reservation wages and working probabilities. On the whole, working probabilities are not very sensitive to changes in offer probabilities, given the other parameter estimates. It would therefore be misleading to conclude that it is the rarity of offers that causes long durations of unemployment because an increase in offer probabilities alone will not reduce the duration. There exist combinations of parameters which would lead to greater sensitivity of working probabilities to offer probabilities, but evidently those combinations do not fit the data as well as the parameters estimated here. |
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Bibliography Citation
Wolpin, Kenneth I. "Estimating a Structural Search Model: The Transition from School to Work." Econometrica 55,4 (July 1987): 801-818.
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