IDEAS home Printed from https://ideas.repec.org/a/ioe/cuadec/v33y1996i99p189-204.html
   My bibliography  Save this article

The Equilibrium Approach to Labor Markets

Author

Listed:
  • Sherwin Rosen

Abstract

This paper exposits the modern theory of equalizing differences,viewed as optimal assignments of workers to jobs. The basic ideas are first illustrated in a simple model with binary choices of work attributes.Multinominal choices are briefly considered after that. Empirical implications are stressed, with special emphasis on elements of selectivity and stratification by tastes and technology. Applications are sketched for certain aspects of the economics of discrimination, human capital, the value of safety and the theory of implicit contracts. Issues raised by assignment stratification according to worker traits and productivities are discussed, and the principle sorting model by comparative advantageis outlined. The implied valuation system on personal traits and its relationship to factor-analytic models, as well as selectivity issues in educational and occupational choice illustrate this aspect of the theory.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Sherwin Rosen, 1996. "The Equilibrium Approach to Labor Markets," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 33(99), pages 189-204.
    • Handle: RePEc:ioe:cuadec:v:33:y:1996:i:99:p:189-204
    as

    Download full text from publisher

    File URL: http://www.economia.uc.cl/docs/099rose.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. John M. Abowd & Orley C. Ashenfelter, 1981. "Anticipated Unemployment, Temporary Layoffs, and Compensating Wage Differentials," NBER Chapters, in: Studies in Labor Markets, pages 141-170, National Bureau of Economic Research, Inc.
    2. Robert E. Hall, 1970. "Why Is the Unemployment Rate So High at Full Employment?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 1(3), pages 369-410.
    3. Mortensen, Dale T., 1983. "A welfare analysis of unemployment insurance: Variations on second-best themes," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 19(1), pages 67-97, January.
    4. Linnerooth, Joanne, 1979. "The Value of Human Life: A Review of the Models," Economic Inquiry, Western Economic Association International, vol. 17(1), pages 52-74, January.
    5. Rosen, Sherwin, 2007. "Studies in Labor Markets," National Bureau of Economic Research Books, University of Chicago Press, number 9780226726304, December.
    6. Antos, Joseph R. & Rosen, Sherwin, 1975. "Discrimination in the market for public school teachers," Journal of Econometrics, Elsevier, vol. 3(2), pages 123-150, May.
    7. MacDonald, Glenn M, 1982. "Information in Production," Econometrica, Econometric Society, vol. 50(5), pages 1143-1162, September.
    8. Martin Neil Baily, 1974. "Wages and Employment under Uncertain Demand," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 41(1), pages 37-50.
    9. Azariadis, Costas, 1975. "Implicit Contracts and Underemployment Equilibria," Journal of Political Economy, University of Chicago Press, vol. 83(6), pages 1183-1202, December.
    10. Sherwin Rosen, 1972. "Learning and Experience in the Labor Market," Journal of Human Resources, University of Wisconsin Press, vol. 7(3), pages 326-342.
    11. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-142, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Cousineau, Jean-Michel, 1984. "La détermination des salaires des policiers municipaux au Québec," L'Actualité Economique, Société Canadienne de Science Economique, vol. 60(2), pages 186-199, juin.
    2. Beason, Dick, 2000. "Separation risk and firm size-earnings relationships in Japan and the US," Japan and the World Economy, Elsevier, vol. 12(3), pages 193-209, September.
    3. Steven F. Venti, 1987. "Wages in the Federal and Private Sectors," NBER Chapters, in: Public Sector Payrolls, pages 147-182, National Bureau of Economic Research, Inc.
    4. Roger, Guillaume, 2016. "Participation in moral hazard problems," Games and Economic Behavior, Elsevier, vol. 95(C), pages 10-24.
    5. Ignacio Rodríguez, 2004. "¿Ventajas Absolutas o Comparativas en las Habilidades Laborales? Evidencia Para el Mercado del Trabajo Chileno a Partir de la Encuesta IALS," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 41(122), pages 125-162.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:eee:labchp:v:1:y:1986:i:c:p:641-692 is not listed on IDEAS
    2. repec:eee:labchp:v:2:y:1986:i:c:p:789-848 is not listed on IDEAS
    3. H. Naci Mocan & Deborah Viola, 1997. "The Determinants of Child Care Workers' Wages and Compensation: Sectoral Differences, Human Capital, Race, Insiders and Outsiders," NBER Working Papers 6328, National Bureau of Economic Research, Inc.
    4. Peter Nijkamp & Jacques Poot, 2005. "The Last Word on the Wage Curve?," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pages 421-450, July.
    5. Abowd, John M & Card, David, 1987. "Intertemporal Labor Supply and Long-term Employment Contracts," American Economic Review, American Economic Association, vol. 77(1), pages 50-68, March.
    6. Simonetta Longhi & Peter Nijkamp & Jacques Poot, 2006. "Spatial Heterogeneity And The Wage Curve Revisited," Journal of Regional Science, Wiley Blackwell, vol. 46(4), pages 707-731, October.
    7. Rosen, Sherwin, 1985. "Implicit Contracts: A Survey," Journal of Economic Literature, American Economic Association, vol. 23(3), pages 1144-1175, September.
    8. John R. Graham & Hyunseob Kim & Si Li & Jiaping Qiu, 2019. "Employee Costs of Corporate Bankruptcy," NBER Working Papers 25922, National Bureau of Economic Research, Inc.
    9. Christian Calmès, 2003. "Poignée de main invisible et persistance des cycles économiques : une revue de la littérature," Staff Working Papers 03-40, Bank of Canada.
    10. Gutierrez, Federico H., 2014. "Acute morbidity and labor outcomes in Mexico: Testing the role of labor contracts as an income smoothing mechanism," Journal of Development Economics, Elsevier, vol. 110(C), pages 1-12.
    11. Margarita Katsimi, 2008. "Training, Job Security And Incentive Wages," Scottish Journal of Political Economy, Scottish Economic Society, vol. 55(1), pages 67-78, February.
    12. Christian Etter, 1986. "Versicherungsaspekte des Arbeitsverhältnisses: Der Einfluß impliziter Arbeitsverträge auf Löhne und Beschäftigung," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 122(III), pages 405-424, September.
    13. Schob, Ronnie & Wildasin, David E., 2007. "Economic integration and labor market institutions: Worker mobility, earnings risk, and contract structure," Regional Science and Urban Economics, Elsevier, vol. 37(2), pages 141-164, March.
    14. Calmès, Christian, 2003. "La poignée de main invisible et la persistance des cycles d’affaires : un survol," L'Actualité Economique, Société Canadienne de Science Economique, vol. 79(4), pages 563-581, Décembre.
    15. Michael Waldman, 1984. "Job Assignments, Signalling, and Efficiency," RAND Journal of Economics, The RAND Corporation, vol. 15(2), pages 255-267, Summer.
    16. Daniel S. Hamermesh, 1986. "Plant Closings, Labor Demand and the Value of the Firm," NBER Working Papers 1839, National Bureau of Economic Research, Inc.
    17. Ilias Livanos, 2010. "The Wage-Local Unemployment Relationship in a Highly Regulated Labour Market: Greece," Regional Studies, Taylor & Francis Journals, vol. 44(4), pages 389-400.
    18. Rosen, Sherwin, 1983. "Unemployment and insurance," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 19(1), pages 5-49, January.
    19. repec:eee:labchp:v:2:y:1986:i:c:p:849-919 is not listed on IDEAS
    20. Robin Boadway & Nicolas Marceau, 1994. "Time inconsistency as a rationale for public unemployment insurance," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 1(2), pages 107-126, October.
    21. Jack E. Triplett, 1983. "Introduction: An Essay on Labor Cost," NBER Chapters, in: The Measurement of Labor Cost, pages 1-60, National Bureau of Economic Research, Inc.
    22. Thorsten Posselt & Thomas Bürkle, 2006. "Franchising als Mischsystem: Die Bestimmung des optimalen Anteils der franchisenehmerbetriebenen Einheiten am Gesamtsystem," Schmalenbach Journal of Business Research, Springer, vol. 58(2), pages 150-168, March.
    23. Lloyd Ulman, 1992. "Why Should Human Resource Managers Pay High Wages?," British Journal of Industrial Relations, London School of Economics, vol. 30(2), pages 177-212, June.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ioe:cuadec:v:33:y:1996:i:99:p:189-204. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Jaime Casassus (email available below). General contact details of provider: https://edirc.repec.org/data/iepuccl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.