Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/20646
Authors: 
Petrongolo, Barbara
Pissarides, Christopher A.
Year of Publication: 
2003
Series/Report no.: 
IZA Discussion paper series 691
Abstract: 
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. But the larger market delivers higher realized wages and not more matches, because the scale effects on matches are offset by the response of reservation wages.
Subjects: 
job search
economies of scale
matching
aggregate matching functions
wage offer distribution
unemployment
JEL: 
J64
J31
D83
Document Type: 
Working Paper

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