Villa, Juan M. (2009): A Survey on Labor Markets Imperfections in Mexico Using a Stochastic Frontier.
Download (289Kb) | Preview
It is assumed that observed labor income is the result of three stages across the job search process. From the reservation wage formation, the bargaining between employers and potential employees when the match, and finally a possible additional adjustment once the worker is completely hired. This paper provides a methodological proposal and an intuitive estimation of the wage gain due to the presence of labor market imperfections across those three stages.
The part of the wage that is explained by labor markets imperfections is estimated by performing a stochastic frontier model with panel data belonging to the Mexican labor survey -ENOE-. The results suggest that 82.7% of the variance of the wages of the subordinated workers is explained by market imperfections. Moreover, public labor offices and small firms are negatively correlated with their presence.
|Item Type:||MPRA Paper|
|Original Title:||A Survey on Labor Markets Imperfections in Mexico Using a Stochastic Frontier|
|Keywords:||Labor market imperfections; wage formation; reservation wage; job search; job matching; stochastic frontier; Mexico; ENOE.|
|Subjects:||J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure; Wage Differentials
J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J21 - Labor Force and Employment, Size, and Structure
|Depositing User:||JUAN M. VILLA|
|Date Deposited:||08. Mar 2010 19:32|
|Last Modified:||14. Feb 2013 10:58|
Arnott, R., Hosios, A., Stiglitz, J. Implicit Contracts, Labor Mobility, and Unemployment. The American Economic Review, Vol. 78, No. 5 (Dec., 1988), pp. 1046-1066
Arnott, R., Stiglitz, J. Labor Turnover, Wage Structures, and Moral Hazards: The Inefficiency of Competitive Markets. Journal of Labor Economics, Vol. 3, No. 4 (Oct., 1985), pp. 434-462
Aslund, O., Rooth, D. Shifts in Attitudes and Labor Market Discrimination: Swedish Experiences After 9-11. Journal of Population Economics, Vol. 18, No. 4 (Dec., 2005) pp. 603-629
Autor, D. The Economics of Labor Market Intermediation: An Analytic Framework. Working paper 14348. National Bureau of Economic Research. September, 2008. United Nations Department of Economic and Social Affairs – Population Division. “World Population Prospects: the 2008 Revision”. March, 2009. Appendix VII.15.
Baldwin, M. An Asymmetric Information Theory of Labor Market Discrimination. Southern Economic Journal, Vol. 57, No. 4 (Apr., 1991), pp. 1148-1154
Bartolucci, C. Gender Wage Gaps Reconsidered: A Structural Approach Using Matched Employer-Employee Data. Collegio Carlo Alberto. Notebook No. 116. September, 2009.
Blau, D. Search for Nonwage Job Characteristics: A Test of the Reservation Wage Hypothesis. Journal of Labor Economics, Vol. 9, No. 2 (Apr., 1991), pp. 196-205
Bemmels, B. How Unions Affect Productivity in Manufacturing Plants. Industrial and labor Relations Review, Vol. 40, No. 2 (Jan., 1987), pp. 241-253
Bloemen, H. Job Search, Search Intensity, and Labor Market Transitions an Empirical Analysis. The Journal of Human Resources, Vol. 40, No. 1 (Winter, 2005), pp. 231-269
Boehm, T., Hofler, R. A Frontier Approach to Measuring the Effect of Market Discrimination: A Housing Illustration. Southern Economic Journal, Vol. 54, No. 2 (Oct., 1987), pp. 301-315
Card, D. The Effect of Unions on Wage Inequality in the U.S. Labor Market. Industrial and Labor Relations Review, Vol. 54, No. 2 (Jan., 2001), pp. 296-315.
Carroll, S., Rolph, J. A Stochastic Model of Discrimination in the Labor Market. Econometrica, Vol. 41, No. 1 (Jan., 1973), pp. 97-108
Cawley, J., Heckman, J., Vytlacil, E. Three Observations on Wages and Measured Cognitive Ability. Labour Economics, Vol. 8, No. 4 (2001), pp. 419-442
Cobb-Clark, D., Tan, M. Noncognitive Skills, Occupational Attainment, and Relative Wages. Centre for Economic Policy Research. Discussion Paper No. 612. July, 2009
Deaton, Angus; Muelbauer, John. Economics and Consumer Behavior. Cambridge University Press, Cambridge, 1980.
Fields, G. Labor Market. ILR Collection Working Papers. Cornell University ILR School. 2007.
Gannon, F., Zenou, Y. Segregation and Labor Discrimination in Cities. Annales d’Economie et de Statistique, No. 45 (Jan. – Mar., 1997), pp. 233-249
Greene, W. Distinguishing Between Heterogeneity and Inefficiency: Stochastic Frontier Analysis of the World Hearth Organization’s Panel Data on National Health Care Systems. Department of Economics, Stern School of Business, New York University, April, 2003.
Heckman, J., Stixrud, J., Urzua, S. The Effects of Cognitive and Noncognitive Abilities on Labor Market Outcomes and Social Behavior. Journal of Labor Economics, Vol. 24, No. 3 (Jul., 2006), pp. 411-482
Heckman, J. Detecting Discrimination. The Journal of Economic Perspectives, Vol. 12, No. 2 (Spring, 1998), pp. 101-116
Heckman, James; Macurdy, Thomas; Labor Econometrics. Handbook of Econometrics, Vol. 3, Edited By z. Griliches and M. D. Intriligator. Elsevier Science Publishers BV, 1986. Heckman, J., Willis, R. The Distribution of Lifetime Labor Force Participation of Married Women: Reply to Mincer an Ofek. The Journal of Political Economy, Vol. 87, No. 1 (Feb., 1979), pp 203-211
Heckman, J. Sample Selection Bias as a Specification Error. Econometrica, 47, 153-161. 1979.
Hofler, Richard; Murphy, Kevin. Estimating Reservation Wages of Employed Workers Using a Stochastic Frontier. Southern Economic Journal, Vol. 60, No. 4 (April 1994), pp. 961-975
Kahn, L., Low, S. The Demand for Labor Market Information. Southern Economic Journal, Vol. 56, No. 4 (Apr., 1990), pp. 1044-1058
Kiefer, N; Neumann G. An empirical job-search model, with a test of the constant reservation wage hypothesis. Journal of Political Economy, Vol. 87, No. 1, pp. 89-107. 1979
Kolpin, V., Singell, L. Information, Strategic Behavior, and Discrimination in the Labor Market. Economic Theory, Vol. 10, No. 1 (Jun., 1997), pp. 175-184
Levy, Santiago. Good Intentions, Bad outcomes. Brookings Institution Press. Washington, DC, 2008.
Mavromaras, K., McGuinness, S., O’Leary, N., Sloane, P., Fok, Y. Job Mismatches and Labour Market Outcomes. ESRI, Working paper No. 314. September, 2009.
Mincer, Jacob. Learning Schooling and Earnings. National Bureau of Economic Research, 1974
Moffitt, R., Wolfe, B. The Effect of the Medicaid Program on Welfare Participation and Labor Supply. The Review of Economics and Statistics, Vol. 74, No. 4 (Nov., 1992), pp. 615-626
Mortensen, D. The Persistence and Indeterminacy of Unemployment in Search Equilibrium. The Scandinavian Journal of Economics, Vol. 91, No. 2, 90th Anniversary Symposium: Whither Macroeconomics? (Jun., 1989), pp. 347-370.
Owen, John D. The demand for Leisure. The Review of Political Enomy, Vol. 79, No. 1 (Jan., -Feb., 1971), 56-76.
Rogerson, R., Shimer, R., Wright, R. Search-Theoretic Models of the Labor Market: A Survey. Journal of Economic Literature, Vol. 43, No. 4 (Dec., 2005), pp. 959-988
Salop, J., Salop, S. Self-Selecion and Turnover in the Labor Market. The Quarterly Journal of Economic, Vol. 90, No. 4 (Nov., 1976), pp. 619-627
Stigler, G. Information in the Labor Market. The Journal of Political Economy, Vol. 70, No. 5, Part 2: Investment in Human Beings (Oct., 1962), pp. 94-105
Swinton, D. A Labor Force Competition Theory of Discrimination in the Labor Market. The American Economic Review, Vol. 67, No. 1, Papers and Proceedings of the Eight-ninth Annual Meeting of the American Economic Association (Feb., 1977), pp. 400-404
Van den Berg, G. Multiple Equilibria and Minimum Wages in Labor Markets with Informational Frictions and Heterogeneous Production Technologies. International Economic Review, Vol. 44, No. 44 (Nov., 2003) pp. 1337-1357
Wessels, W. The Effects of Employment and Productivity: An Unresolved Contradiction. Journal of Labor Economics, Vol. 3, No. 1, (Jan., 1985), pp. 101-108