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Competition for Qualified Workers through Interdependent Wages

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  • Wauthy, Xavier

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

Abstract

A labour market is modelled where two firms, differentiated by their technologies are competing in wages to attract workers endowed with specific qualification level. We show how worker’s willingness to acquire qualification and firms’ ability to set wages explain wages differential at the Nash equilibrium. Markets outcomes at the competitive equilibrium are compared to those resulting from strategic wage setting behaviour : imperfect competition solely may create unemployment but may also be a condition for heterogenous labour demands to exist.

Suggested Citation

  • Wauthy, Xavier, 1994. "Competition for Qualified Workers through Interdependent Wages," LIDAM Discussion Papers IRES 1994029, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    • Handle: RePEc:ctl:louvir:1994029
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