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Evidence on the Incidence of Wage Posting, Wage Bargaining, and On-the-Job Search

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  • Robert E. Hall
  • Alan B. Krueger

Abstract

Some workers bargain with prospective employers before accepting a job. Others face a posted wage as a take-it-or-leave-it opportunity. Both modes of wage determination have generated large bodies of research. We surveyed a representative sample of US workers to inquire about the wage determination process at the time they were hired into their current or most recent jobs. A third of the respondents reported bargaining over pay before accepting their current jobs. Almost a third of workers had precise information about pay when they first met with their employers, a sign of wage posting. About 40 percent of workers were on-the-job searchers-they could have remained at their earlier jobs at the time they accepted their current jobs, indicating a more favorable bargaining position than is held by unemployed job-seekers. About half of all workers reported that their employers had learned their pay in their earlier jobs before making the offer that led to the current job. (JEL C83, J31, J52, J64)

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Bibliographic Info

Article provided by American Economic Association in its journal American Economic Journal: Macroeconomics.

Volume (Year): 4 (2012)
Issue (Month): 4 (October)
Pages: 56-67

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Handle: RePEc:aea:aejmac:v:4:y:2012:i:4:p:56-67

Note: DOI: 10.1257/mac.4.4.56
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  1. Muthoo,Abhinay, 1999. "Bargaining Theory with Applications," Cambridge Books, Cambridge University Press, number 9780521576475, October.
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Cited by:
  1. Brenzel, Hanna & Gartner, Hermann & Schnabel, Claus, 2013. "Wage posting or wage bargaining? Evidence from the employers' side," IWQW Discussion Paper Series 08/2013, Friedrich-Alexander-Universität Erlangen-Nürnberg, Institut für Wirtschaftspolitik und Quantitative Wirtschaftsforschung (IWQW).
  2. Felbermayr, Gabriel & Impullitti, Giammario & Prat, Julien, 2014. "Firm Dynamics and Residual Inequality in Open Economies," IZA Discussion Papers 7960, Institute for the Study of Labor (IZA).
  3. William Hawkins, 2014. "Online Appendix to "Bargaining with Commitment Between Workers and Large Firms"," Technical Appendices 12-114, Review of Economic Dynamics.
  4. Kohei Kawamura (University of Edinburgh) and Jozsef Sakovics (University of Edinburgh), 2013. "Spillovers of Equal Treatment in Wage Offers," ESE Discussion Papers 221, Edinburgh School of Economics, University of Edinburgh.
  5. Paul Gomme & Damba Lkhagvasuren, 2013. "The Cyclicality of Search Intensity in a Competitive Search Model," Working Papers 13002, Concordia University, Department of Economics, revised Sep 2013.
  6. Peter Cappelli & Monika Hamori, 2013. "Who Says Yes When the Headhunter Calls? Understanding Executive Job Search Behavior," NBER Working Papers 19295, National Bureau of Economic Research, Inc.
  7. Suverato, Davide, 2014. "Export and the Labor Market: a Dynamic Model with on-the-job Search," Discussion Papers in Economics 20919, University of Munich, Department of Economics.
  8. Davide Suverato, 2014. "Export and the Labor Market: a Dynamic Model with on-the-job Search," Development Working Papers 368, Centro Studi Luca d\'Agliano, University of Milano, revised 26 Jun 2014.
  9. Ronald Wolthoff, 2013. "It's About Time: Implications of the Period Length in an Equilibrium Search Model," Working Papers tecipa-476, University of Toronto, Department of Economics.

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