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Wage Dynamics, Cohort Effects, and Limited Commitment Models

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  • Pedro Martins

    (Queen Mary, University of London,)

  • Andy Snell

    (University of Edinburgh,)

  • Jonathan P. Thomas

    (University of Edinburgh,)

Abstract

In this paper we analyse a model in which firms cannot pay discriminate based on year of entry to the firm, and argue that the wage dynamics are consistent with the empirical results of Beaudry and DiNardo (1991). Their results have been interpreted as supporting a model in which workers are ex post mobile. Since in our model worker mobility/commitment does not affect the optimal contract, it is argued that existing empirical research does not discriminate between different models of worker commitment. (JEL: E32, J41) Copyright (c) 2005 The European Economic Association.

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Bibliographic Info

Article provided by MIT Press in its journal Journal of the European Economic Association.

Volume (Year): 3 (2005)
Issue (Month): 2-3 (04/05)
Pages: 350-359

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Handle: RePEc:tpr:jeurec:v:3:y:2005:i:2-3:p:350-359

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Cited by:
  1. Martins, Pedro S. & Snell, Andy & Thomas, Jonathan P., 2009. "Real and Nominal Wage Rigidity in a Model of Equal-Treatment Contracting," IZA Discussion Papers 4346, Institute for the Study of Labor (IZA).

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