[PDF] Wage Competition With Heterogeneous Workers And Firms eBook

Author : Edward P. Lazear
Publisher : University of Chicago Press
Page : 473 pages
File Size : 23,85 MB
Release : 2009-05-15
Category : Business & Economics
ISBN : 0226470512

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The distribution of income, the rate of pay raises, and the mobility of employees is crucial to understanding labor economics. Although research abounds on the distribution of wages across individuals in the economy, wage differentials within firms remain a mystery to economists. The first effort to examine linked employer-employee data across countries, The Structure of Wages:An International Comparison analyzes labor trends and their institutional background in the United States and eight European countries. A distinguished team of contributors reveal how a rising wage variance rewards star employees at a higher rate than ever before, how talent becomes concentrated in a few firms over time, and how outside market conditions affect wages in the twenty-first century. From a comparative perspective that examines wage and income differences within and between countries such as Denmark, Italy, and the Netherlands, this volume will be required reading for economists and those working in industrial organization.

Author : John M. Abowd
Publisher : Université de Montréal, Centre de recherche et développement en économique
Page : 94 pages
File Size : 39,21 MB
Release : 1994
Category : Business & Economics
ISBN :

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We study a longitudinal sample of over one million French workers and over 500,000 employing firms. Real total annual compensation per worker is decomposed into components related to observable characteristics, worker heterogeneity, firm heterogeneity and residual variation. Except for the residual, all components may be correlated in an arbitrary fashion. At the level of the individual, we find that person-effects, especially those not related to observables like education, are the most important source of wage variation in France. Firm-effects, while important, are not as important as person-effects. At the level of firms, we find that enterprises that hire high-wage workers are more productive but not more profitable. They are also more capital and high-skilled employee intensive. Enterprises that pay higher wages, controlling for person-effects, are more productive and more profitable. They are also more capital intensive but are not more high-skilled labor intensive. We also find that person-effects explain 92% of inter-industry wage differentials.

Author : Robert Shimer
Publisher :
Page : 37 pages
File Size : 13,88 MB
Release : 2001
Category : Economics
ISBN :

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This paper studies the assignment of heterogeneous workers to heterogeneous jobs in the presence of coordination frictions. Firms offer human-capital-contingent wages, workers observe these and apply for a job. In a symmetric equilibrium, identical workers use identical mixed strategies in deciding where to apply, and the randomness introduced by mixed strategies generates equilibrium unemployment and vacancies. The equilibrium can be interpreted as the competitive equilibrium of a closely related model, ensuring constrained efficiency. The model generates a rich interaction between the heterogeneous workers and firms. Firms attract applications from multiple types of workers, and earn higher profits when they hire a more productive worker. Identical workers apply for jobs with different productivity and get higher wages when they land a more productive job. Despite this mismatch, I show that in some special cases, the model generates assortative matching, with a positive correlation between matched workers' and firms' productivity

Author : Brandon Charles Lehr
Publisher :
Page : 133 pages
File Size : 19,91 MB
Release : 2010
Category :
ISBN :

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In this thesis, I study two different economies that consist of heterogeneous labor. By allowing for differences among individuals where previous analyses restricted attention to homogeneous labor, I am able to understand the impact of such a consideration on issues of optimal policy and potential equilibria. The first chapter, Optimal Social Insurance with Individual Private Insurance and Moral Hazard, characterizes optimal social insurance in an economy where competitive firms also provide insurance to workers facing uncertain outcomes. An ex-ante heterogeneous population of workers exerts effort to increase the likelihood of high outcome events. This chapter is novel in its joint consideration of two sources of heterogeneity, two potential sources of insurance, and an endogenous ex-post distribution of outcomes. The introduction of ex-ante heterogeneity in the presence of optimal private insurance changes the optimal prescription for social insurance away from zero. Moreover, the relative source of the variation in outcomes due to ex-ante heterogeneity and ex-post shocks plays a significant role in the welfare loss associated with setting optimal social insurance without recognizing the presence of private insurance. The second chapter, Efficiency Wages with Heterogeneous Agents, builds a model of efficiency wages with heterogeneous workers in the economy who differ with respect to their disutility of labor effort. In such an economy, two types of pure strategy symmetric Nash equilibria in firm wage offers can exist: a no-shirking equilibrium in which all workers exert effort while employed and a shirking equilibrium in which within each firm some workers exert effort while others shirk. The type of equilibrium that prevails in the economy depends crucially on the extent of heterogeneity among the workers. In addition, it is shown that the characterization of the economy is independent of allowing for variable labor hours and the subsequent adverse selection problem it introduces, as there does not exist a pure strategy symmetric separating Nash equilibrium. Finally, in the third chapter I correct the proof of the main proposition in the analysis of an efficiency wage model with a continuum of heterogeneous agents constructed by Albrecht and Vroman (1998).

Author : Yi Huang
Publisher : International Monetary Fund
Page : 47 pages
File Size : 10,30 MB
Release : 2014-10-16
Category : Business & Economics
ISBN : 1498332307

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This paper provides the first systematic study of how minimum wage policies in China affect firm employment over the 2000-2007 periods. Using a novel dataset of minimum wage regulations across more than 2,800 counties matched with firm-level data, we investigate both the effect of the minimum wage and its policy enforcement tightening in 2004. A dynamic panel (difference GMM) estimator is combined with a “neighbor-pairs-approach” to control for unobservable heterogeneity common to “border counties” that are subject to different minimum wage changes. We show that minimum wage increases have a significant negative impact on employment, with an estimated elasticity of -0.1. Furthermore, we find a heterogeneous effect of the minimum wage on employment which depends on the firm's wage level. Specifically, the minimum wage has a greater negative impact on employment in low-wage firms than in high-wage firms. Our results are robust for different treatment groups, sample attrition correction, and placebo tests.