Assistant Professor
University of California Riverside
Research Interests: Macroeconomics, Labor Economics
Working Papers
Unemployment History and Frictional Wage Dispersion
Abstract
This paper studies wage dispersion among identical workers in a random matching search model in which workers lose human capital during unemployment. Wage dispersion increases, as workers accept lower wages to avoid long unemployment spells. The model is an important improvement over baseline search models. It explains between a third and half of the observed residual wage dispersion. When adding on-the-job search, the model accounts for all of the residual wage dispersion and generates substantial dispersion even for high values of non-market time. The paper thus addresses the trade-off between explaining frictional wage dispersion and the cyclical behavior of unemployment.
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Work in Progress
Fiscal Policy with Unemployment History
Contact
Victor Ortego-Marti
Department of Economics
University of California Riverside
3132 Sproul Hall
Riverside CA 92521
Email: victor.ortego-marti@ucr.edu