Scandinavian Working Papers in Economics
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IFAU - Institute for Evaluation of Labour Market and Education Policy Working Paper Series
IFAU - Institute for Evaluation of Labour Market and Education Policy

No 2002:22:
A cross-country comparison of labor market frictions

Geert Ridder and Gerard J. van den Berg ()

Abstract: In this paper we define and estimate measures of labor market frictions using data on job durations. We compare different estimation methods and different types of data. We propose and apply an unconditional inference method that can be applied to aggregate duration data. It does not require wage data, it is invariant to the way in which wages are determined, and it allows workers to care about other job characteristics. The empirical analysis focuses on France, but we perform separate analyses for the USA, the UK, Germany and the Netherlands. We quantify the monopsony power due to search frictions and we examine the policy effects of the minimum wage, unemployment benefits and search frictions.

Keywords: Wages; search frictions; cross-country comparisons; monopsony power; minimum wage; job search; mobility; labour market policy; (follow links to similar papers)

JEL-Codes: J31; J42; J63; J68; (follow links to similar papers)

25 pages, December 4, 2002

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This paper is published as:
Ridder, Geert and Gerard J. van den Berg, (2003), 'Measuring labor market frictions: A cross-country comparison', Journal of the European Economic Association, Vol. 1, No. 1, pages 224-244

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