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Wealth, Search, and the Job Ladder

Author

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  • Katsuhiro Komatsu

    (Kyoto University)

Abstract

This paper studies how the wealth accumulation of workers and their job search behavior influence firm wage setting. I incorporate wealth accumulation and endogenous search intensity of risk-averse workers into an equilibrium job-ladder model. The wagesensitive search of wealth-poor workers restrains wage markdowns near the bottom of the job ladder. Removing this discipline through complete markets allows low-wage firms to further push down wages, lowering the average wage and raising wage inequality. This firm-side response, which I call the insurance channel, offsets the direct consumption-smoothing gain of unemployment insurance.

Suggested Citation

  • Katsuhiro Komatsu, 2026. "Wealth, Search, and the Job Ladder," KIER Working Papers 1133, Kyoto University, Institute of Economic Research.
    • Handle: RePEc:kyo:wpaper:1133
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    Keywords

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    JEL classification:

    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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