Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/170825
Authors: 
Bazen, Stephen
Waziri, Khalid Maman
Year of Publication: 
2017
Series/Report no.: 
IZA Discussion Papers 10841
Abstract: 
Stochastic earnings frontiers have been used in a relatively small number of papers to analyse workers' ability to capture their full potential earnings in labour markets where there is inefficient job matching (due to lack of information, discrimination, over-education or during process of assimilation of migrants). Using a representative survey of young persons having left full-time education in France in 1998 and interviewed in 2001 and 2005, this paper examines the process of their assimilation into normal employment and the extent to which job matches are inefficient in the sense that the pay in a job is below an individual's potential earnings (determined by education, other forms of training and labour market experience). Our results suggest that young workers manage to obtain on average about 82% of their potential earnings three years after leaving full-time education and earnings inefficiency had disappeared four years later. The results are robust to the treatment of selectivity arising from the exclusion of the unemployed in the estimation of the frontier.
Subjects: 
stochastic earnings frontier
job matching
youth employment
earnings determination
sample selection stochastic frontier
JEL: 
J30
J13
J24
C24
Document Type: 
Working Paper

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