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Wage Dispersion and Wage Dynamics Within and Across Firms

Carrillo-Tudela, C and Smith, E (2009) Wage Dispersion and Wage Dynamics Within and Across Firms. UNSPECIFIED. Institute for the Study of Labor, IZA Discussion Papers, 4031.

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This paper examines wage dispersion and wage dynamics in a stock-flow matching economy with on-the-job search. Under stock-flow matching, job seekers immediately become fully informed about the stock of viable vacancies. If only one option is available, monopsony wages result. With more than one firm bidding, Bertrand wages arise. The initial and expected threat of competition determines the evolution of wages and thereby introduces a novel way of understanding wage differences among similar workers. The resulting wage distribution has an interior mode and prominent, well-behaved tails. The model also generates job-to-job transitions with both wage cuts and jumps.

Item Type: Monograph (UNSPECIFIED)
Additional Information: Source info: IZA Discussion Paper No. 4031
Uncontrolled Keywords: wage dispersion; wage dynamics; job search; stock-flow matching
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences
Faculty of Social Sciences > Economics, Department of
SWORD Depositor: Elements
Depositing User: Elements
Date Deposited: 03 Jul 2012 11:00
Last Modified: 07 Oct 2022 10:06

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