Time: 10:00 am- 11:30 am, Oct. 25th, 2024

Speaker: Robert Shimer

(University of Chicago)

Venue: 1F, Wanzhong Building, Langrun Garden, Peking University

Platform: Zoom

Meeting ID: 994 5991 6531

Passcode: inse

Abstract:

We develop a random search model of the labor market with two-sided heterogeneity and match-specific productivity shocks. Our model has two robust predictions: i) the average log wage that a worker receives is increasing in the worker's and employer's productivity and ii) there is positively assortative matching between high wage workers and high wage firms. Wages and sorting are driven by the same selection force. All workers are equally likely to meet all firms, but low (high) productivity workers have a higher average surplus from meeting low (high) productivity firms. The high surplus meetings result in matches more frequently, generating positive assortative matching. Since only meetings that result in matches are observed in administrative wage data, such data contain only a selected subset of meetings, driving the result that average log wages are increasing and submodular. We show that our findings are consistent with recent results in the empirical wage literature.

Speaker:

Robert Shimer is the George J. Stigler Distinguished Service Professor in Economics and the College at the University of Chicago, where has been a faculty member since 2003. Shimer is widely recognized for his contributions to labor economics and macroeconomics, focusing on search frictions, labor market mismatches, and unemployment dynamics.  He is an elected member of the American Academy of Arts and Sciences, a fellow of the Econometric Society, an Economic Theory Fellow of the Society for the Advancement of Economic Theory, and a Fellow of the Society of Labor Economists. He was awarded the Sherwin Rosen Prize for Outstanding Contributions in Labor Economics.  In recent years, he has consulted for the Federal Reserve Banks of Atlanta and Chicago and held leadership roles including co-chairing the NBER’s Economic Fluctuations and Growth Macro Perspectives Group, serving as head editor of the Journal of Political Economy, and chairing the Kenneth C. Griffin Department of Economics at the University of Chicago. His work has been published in top journals, including the American Economic Review, Econometrica, Quarterly Journal of Economics, Review of Economic Studies, and Journal of Political Economy. Shimer earned his Ph.D. from the Massachusetts Institute of Technology in 1996.