[PDF] Wage Dispersion With Heterogeneous Wage Contracts eBook

Author : Federal Reserve Board
Publisher :
Page : 54 pages
File Size : 22,7 MB
Release : 2015-04-10
Category :
ISBN : 9781511660402

GET BOOK

In this paper, I demonstrate a mechanism by which two canonical wage-setting mechanisms - wage posting (WP) and sequential auction (SA) - exist side-by-side in the steady state of a random, on-the-job search equilibrium with homogeneous workers and heterogeneous rms.

Author : Dale Mortensen
Publisher : MIT Press
Page : 170 pages
File Size : 25,48 MB
Release : 2003
Category : Business & Economics
ISBN : 9780262633192

GET BOOK

A theoretical and empirical examination of wage differentials findsthat traditional theories of competition do not explain why workers with identical skills are paid differently.

Author : International Monetary Fund
Publisher : INTERNATIONAL MONETARY FUND
Page : 0 pages
File Size : 35,64 MB
Release : 2005-03-01
Category : Business & Economics
ISBN : 9781451860832

GET BOOK

We analyze labor market models where the law of one price does not hold-that is, models with equilibrium wage dispersion. We begin by assuming workers are ex ante heterogeneous, and highlight a flaw with this approach: if search is costly, the market shuts down. We then assume workers are homogeneous, but matches are ex post heterogeneous. This model is robust to search costs, and it delivers equilibrium wage dispersion. However, we prove the law of two prices holds: generically, we cannot get more than two wages. We explore several other models, including one combining ex ante and ex post heterogeneity, which is robust and can deliver more than two-point wage distributions.

Author : Jongheuk Kim
Publisher :
Page : 31 pages
File Size : 19,33 MB
Release : 2017
Category :
ISBN :

GET BOOK

I build a small open economy (SOE) dynamic stochastic general equilibrium (DSGE) model to investigate the effect of a heterogeneous wage contract between regular and temporary workers on a macroeconomic volatility in a financially fragile economy. The imperfect financial market condition is captured by a quadratic financial adjustment cost for borrowing foreign assets, and the labor market friction is captured by a Nash bargaining process which is only available to the regular workers when they negotiate their wages with the firms while the temporary workers are given their wage which simply equals the marginal cost. As a result of impulse responses to a domestic productivity shock, the higher elasticity of substitution between two types of workers and the lower weight on the regular workers in the firm's production process induce the higher volatilities in most variables. This is reasoned that the higher substitutability creates more volatile wage determination process while the lower share of the regular workers weakens their Nash bargaining power in the contract process.

Author : Damien Gaumont
Publisher : INTERNATIONAL MONETARY FUND
Page : 16 pages
File Size : 28,14 MB
Release : 2006-01-01
Category :
ISBN : 9781451862799

GET BOOK

Search models with posting and match-specific heterogeneity generate wage dispersion. Given K values for the match-specific variable, it is known that there are K reservation wages that could be posted, but generically never more than two actually are posted in equilibrium. What is unknown is when we get two wages, and which wages are actually posted. For an example with K = 3, we show equilibrium is unique; may have one wage or two; and when there are two, the equilibrium can display any combination of posted reservation wages, depending on parameters. We also show how wages, profits, and unemployment depend on productivity.

Author : Damien Gaumont
Publisher :
Page : 25 pages
File Size : 16,7 MB
Release : 2005
Category :
ISBN :

GET BOOK

We analyze labor market models where the law of one price does not hold; i.e., models with equilibrium wage dispersion. We begin assuming workers are ex ante heterogeneous, and highlight a flaw with this approach: if search is costly, the market shuts down. We then assume workers are homogeneous but matches are ex post heterogeneous. This model is robust to search costs, and delivers equilibrium wage dispersion. However, we prove the law of two prices holds: generically we cannot get more than two wages. We explore several other models, including one combining ex ante and ex post heterogeneity; this model is robust, and can deliver more than two-point wage distributions.

Author : Edward P. Lazear
Publisher : University of Chicago Press
Page : 473 pages
File Size : 36,90 MB
Release : 2009-05-15
Category : Business & Economics
ISBN : 0226470512

GET BOOK

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.