This paper applies an equilibrium search to study the transition from schooling to work of US high school graduates. We consider the case where there is heterogeneity in firm productivity and the number of firm types is discrete. For this case the estimation problem is non-standard and the...

This paper makes two contributions to the literature on equilibrium search models. We cast the problem of determining the number of productivity types into a search for modes of the wage distribution and we use recent techniques of mode hunting to estimate the number and location of these modes.