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Selection Wages: An Example

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Author Info
Ekkehart Schlicht () (University of Munich and IZA Bonn)

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Abstract

Offering higher wages may enable firms to attract more applicants and screen them more carefully. If firms compete in this way in the labor market, "selection wages" emerge. This note illustrates this wage-setting mechanism. Selection wages may engender unconventional results, such as a pre-tax wage compression induced by the introduction of a progressive wage tax.

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File URL: ftp://repec.iza.org/RePEc/Discussionpaper/dp2507.pdf
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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2507.

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Length: 9 pages
Date of creation: Dec 2006
Date of revision:
Handle: RePEc:iza:izadps:dp2507

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Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
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Related research
Keywords: wage formation; efficiency wage; incentive wage; mobility; job-specific pay; wage-tax;

Find related papers by JEL classification:
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
J62 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Job, Occupational and Intergenerational Mobility; Promotion
J63 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Turnover; Vacancies; Layoffs

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Phelps, Edmund S, 1995. "The Structuralist Theory of Employment," American Economic Review, American Economic Association, vol. 85(2), pages 226-31, May. [Downloadable!] (restricted)
  2. Schlicht, Ekkehart, 2001. "Job Rents in a Stylized Labor Market," Discussion Papers in Economics 1254, University of Munich, Department of Economics. [Downloadable!]
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This page was last updated on 2009-11-9.

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