Scandinavian Working Papers in Economics

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 ()
Additional contact information
Geert Ridder: University of Southern California, Postal: Department of Economics, Los Angeles, CA-90089, USA
Gerard J. van den Berg: IFAU - Institute for Labour Market Policy Evaluation, Postal: P O Box 513, SE-751 20 Uppsala, Sweden

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

JEL-codes: J31; J42; J63; J68

25 pages, December 4, 2002

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