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Dual Labor Markets, Efficiency Wages, and Search

  • Albrecht, James W.

    (Georgetown University)

  • Vroman, Susan B.

    (Georgetown University)

This article presents an equilibrium model of a dual labor market. Firms are assumed to be identical ex ante and dualism arises endogenously. The dual labor market outcome is supported by efficiency wage and search considerations. Firms choose wage/effort requirement packages optimally given optimal search and effort choice by workers, and vice versa. The authors prove existence and investigate the occurence and nature of dual labor market equilibria. Copyright 1992 by University of Chicago Press.

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Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 267.

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Length: 28 pages
Date of creation: Nov 1990
Date of revision:
Handle: RePEc:hhs:iuiwop:0267
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  1. Ken Burdett & Dale T. Mortensen, 1979. "Search, Layoffs, and Labor Market Equilibrium," Discussion Papers 380, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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