Hiring Standards And Labour Market Clearing
AbstractConsider a labour market with heterogeneous workers. When recruiting workers, firms set a hiring standard and make a wage offer. A more demanding hiring standard necessitates a better wage offer in order to attract enough qualified applicants. As a result, an efficiency wage effect is obtained. An equilibrium emerges which does not clear the labour market. The wage level depends on structural characteristics of labour supply, such as heterogeneity and mobility of the workers, but-in contrast to other efficiency-wage models-not on the level of unemployment and is, thus, compatible with increasing unemployment as observed, e.g. in Germany. Copyright Blackwell Publishing Ltd 2005.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Metroeconomica.
Volume (Year): 56 (2005)
Issue (Month): 2 (05)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0026-1386
Other versions of this item:
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
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- repec:iab:iabzaf:v:38:i:2/3:p:383-395 is not listed on IDEAS
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