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Content archived on 2024-06-18

Wage Dynamics, Sorting Patterns in Labour Markets and Policy Evaluation

Objective

WASP is aimed at developing realistic empirical equilibrium search models of the labour market, with heterogeneous agents and long-term self-enforcing contracts, that
• Can help better understand rent sharing mechanisms in labour markets, • Allow for multiple sources of productivity dynamics, including deterministic human capital accumulation and idiosyncratic productivity shocks, • Do not rule out sorting by assumption, nor the possibility of mismatch – as in perfectly competitive Beckerian marriage models, • Can fit linked employer-employee data in all three dimensions: across workers, firms and time, • Can be used for policy evaluation.

These research questions will be addressed within six different sub-projects:
1. Understanding tenure effects. Human capital accumulation and productivity shocks are introduced in a search-matching framework to explain the difference between tenure and experience effects.
2. Employment protection policies, wage dynamics and sorting. A search-matching model with productivity shocks is estimated on worker data and used to discuss the optimal design of employment protection policies.
3. Large firms, sorting and linked employer-employee data. Firms post more than one job offer. The model permits the use of linked employer-employee data for estimation.
4. Risk-aversion, savings and risk sharing. Risk-averse workers, subject to productivity shocks, are matched with risk-neutral employers. The model is used to measure the relative importance of self-insurance vis-à-vis insurance provided by the employer.
5. Unemployment, wage inequality and business cycle. Allowing for aggregate productivity shocks in a search-matching model with worker heterogeneity can explain the unemployment volatility puzzle and the effect of business cycles on the wage distribution.
6. Marriage, search and welfare policy. The intra-household resource allocation process is endogenised in a search model of marriage.

Fields of science (EuroSciVoc)

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Topic(s)

Calls for proposals are divided into topics. A topic defines a specific subject or area for which applicants can submit proposals. The description of a topic comprises its specific scope and the expected impact of the funded project.

Call for proposal

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ERC-2010-AdG_20100407
See other projects for this call

Funding Scheme

Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.

ERC-AG - ERC Advanced Grant

Host institution

FONDATION NATIONALE DES SCIENCES POLITIQUES
EU contribution
€ 1 340 494,00
Address
RUE SAINT GUILLAUME 27
75341 Paris
France

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Region
Ile-de-France Ile-de-France Paris
Activity type
Higher or Secondary Education Establishments
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Total cost

The total costs incurred by this organisation to participate in the project, including direct and indirect costs. This amount is a subset of the overall project budget.

No data

Beneficiaries (2)

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