This file is part of IDEAS , which uses RePEc data
[ Papers |
Articles |
Software |
Books |
Chapters |
Authors |
Institutions |
JEL Classification |
NEP reports |
Search |
New papers by email |
Author registration |
Rankings |
Volunteers |
FAQ |
Blog |
Help! ]
Worker Replacement Author info | Abstract | Publisher info | Download info | Related research | Statistics Guido Menzio () (Department of Economics, University of Pennsylvania)
Espen Moen () (Department of Economics, Norwegian School of Management (NSM))
Additional information is available for the following
registered author(s):
We consider a frictional labor market in which firms want to insure their senior employees against income fluctuations and, at the same time, want to recruit new employees to fill their vacant positions. Firms can commit to a wage schedule, i.e. a schedule that specifies the wage paid by the firm to its employees as function of their tenure and other observables. However, firms cannot commit to the employment relationship with any of their workers, i.e. firms can dismiss workers at will. We find that, because of the firm’s limited commitment, the optimal schedule prescribes not only a rigid wage for senior employees, but also a downward rigid wage for new hires. Moreover, we find that, while the rigidity of the wage of senior workers does not affect the allocation of labor, the rigidity of the wage of new hires magnifies the response of unemployment and vacancies to negative shocks to the aggregate productivity of labor.
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. 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.
Paper provided by Penn Institute for Economic Research, Department of Economics, University of Pennsylvania in its series PIER Working Paper Archive with number
08-040.
Download reference. The following formats are available: HTML
(with abstract ),
plain text
(with abstract ),
BibTeX ,
RIS (EndNote, RefMan, ProCite),
ReDIF
Length: 37 pages
Date of creation: 01 Sep 2008Date of revision:
Handle: RePEc:pen:papers:08-040Contact details of provider: Postal: 3718 Locust Walk, Philadelphia, PA 19104 Phone: 215-898-9992 Fax: 215-573-2378 Email: Web page: http://economics.sas.upenn.edu/pier More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: (Dolly Guarini).
Keywords: Competitive Search ; Risk Sharing ; Unemployment ; Business Cycles ; Other versions of this item:
Find related papers by JEL classification: E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search
This paper has been announced in the following NEP Reports :
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.: John Kennan, 2006.
"Private Information, Wage Bargaining and Employment Fluctuations ,"
NBER Working Papers
11967, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Other versions: Beaudry, Paul & DiNardo, John, 1991.
"The Effect of Implicit Contracts on the Movement of Wages over the Business Cycle: Evidence from Micro Data ,"
Journal of Political Economy ,
University of Chicago Press, vol. 99(4), pages 665-88, August.
[Downloadable!] (restricted)
Leena Rudanko, 2005.
"Labor Market Dynamics under Long Term Wage Contracting ,"
2005 Meeting Papers
876, Society for Economic Dynamics.
[Downloadable!]
Other versions:
Leena Rudanko, 2006.
"Labor Market Dynamics under Long Term Wage Contracting ,"
2006 Meeting Papers
314, Society for Economic Dynamics.
[Downloadable!] Leena Rudanko, 2008.
"Labor Market Dynamics under Long Term Wage Contracting ,"
Boston University - Department of Economics - Working Papers Series
wp2008-003, Boston University - Department of Economics.
[Downloadable!] Rudanko, Leena, 2009.
"Labor market dynamics under long-term wage contracting ,"
Journal of Monetary Economics ,
Elsevier, vol. 56(2), pages 170-183, March.
[Downloadable!] (restricted) Andy Snell & Jonathan Thomas, 2006.
" Labor Contracts, Equal Treatment and Wage-Unemployment Dynamics ,"
CDMA Conference Paper Series
0603, Centre for Dynamic Macroeconomic Analysis.
[Downloadable!]
Other versions: Mark Gertler & Antonella Trigari, 2006.
"Unemployment fluctuations with staggered Nash wage bargaining ,"
Proceedings ,
Federal Reserve Bank of San Francisco.
[Downloadable!]
Other versions:
Mark Gertler & Antonella Trigari, 2006.
"Unemployment Fluctuations with Staggered Nash Wage Bargaining ,"
Computing in Economics and Finance 2006
525, Society for Computational Economics.
Mark Gertler & Antonella Trigari, 2006.
"Unemployment Fluctuations With Staggered Nash Wage Bargaining ,"
NBER Working Papers
12498, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted) Mark Gertler & Antonella Trigari, 2007.
"Unemployment Fluctuation with Staggered Nash Wage Bargaining ,"
CFS Working Paper Series
2007/09, Center for Financial Studies.
[Downloadable!] Mark Gertler & Antonella Trigari, 2009.
"Unemployment Fluctuations with Staggered Nash Wage Bargaining ,"
Journal of Political Economy ,
University of Chicago Press, vol. 117(1), pages 38-86, 02.
[Downloadable!] (restricted) Thomas, Jonathan & Worrall, Tim, 1988.
"Self-enforcing Wage Contracts ,"
Review of Economic Studies ,
Blackwell Publishing, vol. 55(4), pages 541-54, October.
[Downloadable!] (restricted)
Azariadis, Costas, 1975.
"Implicit Contracts and Underemployment Equilibria ,"
Journal of Political Economy ,
University of Chicago Press, vol. 83(6), pages 1183-1202, December.
[Downloadable!] (restricted)
Guido Menzio & Shouyong Shi, 2008.
"Efficient Search on the Job and the Business Cycle ,"
Working Papers
tecipa-327, University of Toronto, Department of Economics.
[Downloadable!]
Other versions: Moen, Espen R, 1997.
"Competitive Search Equilibrium ,"
Journal of Political Economy ,
University of Chicago Press, vol. 105(2), pages 385-411, April.
Other versions: Baily, Martin Neil, 1974.
"Wages and Employment under Uncertain Demand ,"
Review of Economic Studies ,
Blackwell Publishing, vol. 41(1), pages 37-50, January.
[Downloadable!] (restricted)
Robert E. Hall, 2005.
"Employment Fluctuations with Equilibrium Wage Stickiness ,"
American Economic Review ,
American Economic Association, vol. 95(1), pages 50-65, March.
[Downloadable!]
Full
references Cited by : (explanations , 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.)
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).
[Downloadable!]
Access and
download statistics Did you know? The most prolific authors have over 700 items listed on IDEAS.
This page was last updated on 2009-11-11.
This information is provided to you by IDEAS at the Department of Economics , College of Liberal Arts and Sciences , University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics .