Competition, Wage Commitments, and Application Fees
In this article, the author intends to justify the rare use of application fees in labor markets. He analyzes a model in which there is a training or testing period preceding a worker's effective production period. With various commitment abilities of firms, the author finds that application fees are used if and only if all future wages can be committed before a worker applies; otherwise, no application fees will be charged. The model is then modified to explain the positive fees in journal submissions and college admissions. Copyright 1997 by University of Chicago Press.
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