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Wage competition with heterogeneous workers and firms

Wage competition with heterogeneous workers and firms
Wage competition with heterogeneous workers and firms
We study imperfect competition in the labor market when both workers and firms are heterogeneous. When firms cannot observe workers’ skill, firms pay workers equal wages, but workers absorb training costs. When firms can identify worker types, firms pay different net wages to different workers. Voters select the level of general education that is financed by a lump-sum tax. Workers are on average better off when firms can observe workers’ skill for a given level of general human capital, but the median voter prefers a higher level of general human capital when firms cannot observe worker types
0734-306X
453-472
Hamilton, Jonathan
39f6b969-871b-49b2-aae1-78a360bab316
Thisse, Jacques-François
0ba7daab-db05-4240-b718-9bf32d622e71
Zenou, Yves
f7c3b72f-b6b6-4550-8b0f-00a127af082e
Hamilton, Jonathan
39f6b969-871b-49b2-aae1-78a360bab316
Thisse, Jacques-François
0ba7daab-db05-4240-b718-9bf32d622e71
Zenou, Yves
f7c3b72f-b6b6-4550-8b0f-00a127af082e

Hamilton, Jonathan, Thisse, Jacques-François and Zenou, Yves (2000) Wage competition with heterogeneous workers and firms. Journal of Labor Economics, 18 (3), 453-472.

Record type: Article

Abstract

We study imperfect competition in the labor market when both workers and firms are heterogeneous. When firms cannot observe workers’ skill, firms pay workers equal wages, but workers absorb training costs. When firms can identify worker types, firms pay different net wages to different workers. Voters select the level of general education that is financed by a lump-sum tax. Workers are on average better off when firms can observe workers’ skill for a given level of general human capital, but the median voter prefers a higher level of general human capital when firms cannot observe worker types

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Published date: 2000

Identifiers

Local EPrints ID: 33073
URI: https://eprints.soton.ac.uk/id/eprint/33073
ISSN: 0734-306X
PURE UUID: 13470336-b57b-4d88-a337-02f8f55e2bb6

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Date deposited: 17 Jul 2006
Last modified: 17 Jul 2017 15:54

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