The Rat Race and Internal Labor Markets
AbstractThe labor market is viewed as a market for labor contracts. A firm is identified as having an internal labor market if the efficient mode of production requires that it employ heterogeneous worker types by offering a wage structure as a set of subsidizing contracts. If the firm is free to offer its choice of wage structures, and if the Wilson notion of equilibrium is considered, then certain irreducible combinations of wage-job contracts will obtain. Depending upon the distribution of worker types, wages in these equilibrium wage structures may not correspond to the marginal productivities of individual workers, but the firm breaks even because the wages of high productivity types subsidize low productivity types within the firm. The theoretical framework of our model is based on recent contributions to the theory of self-selection screening.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by The RAND Corporation in its journal Bell Journal of Economics.
Volume (Year): 8 (1977)
Issue (Month): 2 (Autumn)
Contact details of provider:
Web page: http://www.rje.org
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Gary-Bobo, Robert J. & Trannoy, Alain, 2013.
"Optimal Student Loans and Graduate Tax under Moral Hazard and Adverse Selection,"
CEPR Discussion Papers
9505, C.E.P.R. Discussion Papers.
- Robert J. Gary-Bobo & Alain Trannoy, 2013. "Optimal Student Loans and Graduate Tax under Moral Hazard and Adverse Selection," CESifo Working Paper Series 4279, CESifo Group Munich.
- Kevin Frick, 1999. "Cross product subsidization in the health insurance market with managed care: A model and issues," Atlantic Economic Journal, International Atlantic Economic Society, vol. 27(2), pages 121-134, June.
- Anjan V. Thakor & Gregory F. Udell, 2004.
"An Economic Rationale for the Pricing Structure of Bank Loan Commitments,"
- Thakor, Anjan V. & Udell, Gregory F., 1987. "An economic rationale for the pricing structure of bank loan commitments," Journal of Banking & Finance, Elsevier, vol. 11(2), pages 271-289, June.
- Jeffrey M. Lacker, 1994. "Does adverse selection justify government intervention in loan markets?," Economic Quarterly, Federal Reserve Bank of Richmond, issue Win, pages 61-95.
- Sukumar Vellakkal, 2009. "Adverse Selection and Private Health Insurance Coverage in India - A Rational Behaviour Model of Insurance Agents under Asymmetric Information," Microeconomics Working Papers 22270, East Asian Bureau of Economic Research.
- Gadi Barlevy, 2008.
"A Leverage Based Model of Speculative Bubbles,"
2008 Meeting Papers
196, Society for Economic Dynamics.
- Finkelstein, Amy & Poterba, James & Rothschild, Casey, 2009.
"Redistribution by insurance market regulation: Analyzing a ban on gender-based retirement annuities,"
Journal of Financial Economics,
Elsevier, vol. 91(1), pages 38-58, January.
- Amy Finkelstein & James Poterba & Casey Rothschild, 2006. "Redistribution by Insurance Market Regulation: Analyzing a Ban on Gender-Based Retirement Annuities," NBER Working Papers 12205, National Bureau of Economic Research, Inc.
- Theodoros M. Diasakos & Kostas Koufopoulos, .
"Efficient Nash Equilibrium under Adverse Selection,"
Discussion Paper Series, Department of Economics
201313, Department of Economics, University of St. Andrews.
- Theodoros M. Diasakos & Kostas Koufopoulos, 2011. "Efficient Nash Equilibrium under Adverse Selection," Carlo Alberto Notebooks 215, Collegio Carlo Alberto.
- Amy Finkelstein, 2002. "When Can Partial Public Insurance Produce Pareto Improvements?," NBER Working Papers 9035, National Bureau of Economic Research, Inc.
- Jeffrey M. Lacker & John A. Weinberg, 1995. "The coalition-proof core in adverse selection economies," Working Paper 94-09, Federal Reserve Bank of Richmond.
- Sukumar Vellakkal, 2010. "Adverse Selection and Private Health Insurance Coverage in India A Rational Behaviour Model of Insurance Agents under Asymmetric Information," Working Papers id:2690, eSocialSciences.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.