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Equilibrium Wage Dispersion An Example

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 w...

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Bibliographic Details
Corporate Author: International Monetary Fund
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2006
Series:IMF Working Papers
Subjects:
Public Expenditure Review
Illicit Financial Flows
Labour
Public Finance & Taxation
Wages, Compensation, And Labor Costs: General
Unemployment: Models, Duration, Incidence, And Job Search
Unemployment
Aggregate Labor Productivity
Aggregate Human Capital
National Government Expenditures And Related Policies: General
Labor
Illegal Behavior And The Enforcement Of Law
Criminology
Money Laundering
White-collar Crime
Expenditures, Public
Wages
Economic Theory
Intergenerational Income Distribution
Public Finance
Income Economics
Employment
Corporate Crime
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary: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
Physical Description:16 pages
ISBN:9781451862799

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