Author: Dale T. MortensenPublisher:
ISBN:
Category :
Languages : en
Pages : 35
Book Description
Equilibrium Wage Distributions
Author: Dale T. MortensenEquilibrium Wage Distributions
Author: Joseph E. StiglitzPublisher:
ISBN:
Category : Wages
Languages : en
Pages : 64
Book Description
This paper analyzes equilibrium in labor markets with costly search. Even in steady state equilibrium, identical labor may receive different wages; this may be the case even when the only source of imperfect information is the inequality of wages which the market is perpetuating. When there are information imperfections arising from (symmetric)differences in non-pecuniary characteristics of jobs and preferences of individuals, there will not in general exist a full employment, zero profit single wage equilibrium. There are, in general, a multiplicity of equilbria. Equilibrium may be characterized by unemployment; in spite of the presence of an excess supply of labor, no firm is willing to hire workers at a lowerwage. It knows that if it does so, the quit rate will be higher, and hence turnover costs(training costs) will be higher, so much so that profits will actually be lower. The model thus provides a rationale for real wage rigidity. The model also provides a theory of equilibrium frictional unemployment. Though the constrained optimality (taking explicitly into account the costs associated with obtaining information and search) may entail unemployment and wage dispersion, the levels of unemployment and wage dispersion in the market equilibrium will not, in general, be (constrained) optimal.
Estimation of Equilibrium Wage Distributions with Heterogeneity
Author: Audra J. BowlusPublisher:
ISBN:
Category : Equilibrium (Economics)
Languages : en
Pages : 40
Book Description
Equilibrium Wage Distributions
Author: Stanford University. Institute for Mathematical Studies in the Social SciencesPublisher:
ISBN:
Category :
Languages : en
Pages : 47
Book Description
Equilibrium Wage Distributions with Word-of-mouth Worker Communication
Author: Jon StrandPublisher:
ISBN: 9788257082642
Category :
Languages : en
Pages : 35
Book Description
Alternative Models of Wage Dispersion
Author: Damien GaumontPublisher: International Monetary Fund
ISBN:
Category : Labor market
Languages : en
Pages : 30
Book Description
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.
Fitting Equilibrium Search Models to Labor Market Data
Author: Audra J. BowlusPublisher: London : Department of Economics, University of Western Ontario
ISBN:
Category : Equilibrium (Economics)
Languages : en
Pages : 32
Book Description
Measuring Productivity Differences in Equilibrium Search Models
Author: Gauthier LanotPublisher:
ISBN:
Category : Equilibrium (Economics)
Languages : en
Pages : 32
Book Description
Equilibrium Unemployment with Wage Posting: Burdett-Mortensen Meet Pissarides
Author: Dale MortensenEquilibrium Wage and Employment Dynamics in a Model of Wage Posting Without Commitment
Author: Melvyn G. ColesPublisher:
ISBN:
Category : Economics
Languages : en
Pages : 29
Book Description
A rich but tractable variant of the Burdett-Mortensen model of wage setting behavior is formulated and a dynamic market equilibrium solution to the model is defined and characterized. In the model, firms cannot commit to wage contracts. Instead, the Markov perfect equilibrium to the wage setting game, characterized by Coles (2001), is assumed. In addition, firm recruiting decisions, firm entry and exit, and transitory firm productivity shocks are incorporated into the model Given that the cost of recruiting workers is proportional to firm employment, we establish the existence of an equilibrium solution to the model in which wages are not contingent on firm size but more productive employers always pay higher wages. Although the state space, the distribution of workers over firms, is large in the general case, it reduces to a scalar that can be interpreted as the unemployment rate in the special case of homogenous firms. Furthermore, the equilibrium is unique. As the dimension of the state space is equal to the number of firms types in general, an (approximate) equilibrium is computable -- National Bureau of Economic Research web site.