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Equilibrium Search Models and the Transition From School To Work
Article first published online: 23 DEC 2001
DOI: 10.1111/1468-2354.00112
Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association
1468-2354/asset/cover.gif?v=1&s=fed4433db533e45650aec00d1db3fbb7fcc93278 "International Economic Review")
Additional Information
How to Cite
Bowlus, A. J., Kiefer, N. M. and Neumann, G. R. (2001), Equilibrium Search Models and the Transition From School To Work. International Economic Review, 42: 317–343. doi: 10.1111/1468-2354.00112
Publication History
- Issue published online: 23 DEC 2001
- Article first published online: 23 DEC 2001
- Abstract
- Cited By
This paper applies the Burdett–Mortensen (1998) equilibrium search model to study the school to work transitions of U.S. high school graduates. We consider the case of discrete firm heterogeneity and provide a computational method to obtain the MLE. Our results show that unemployed blacks receive fewer offers than whites and employed blacks are more likely to lose their jobs. Importantly, employed blacks and whites receive job offers at the same rate. Assigning the whites' search parameters to the blacks and re-solving reveals that 75 percent of the observed wage differential is explained by the job destruction rate differences.