Selection Wages and Discrimination
Applicants for any given job are more or less suited to fill it, and the firm will select the best among them. Increasing the wage offer attracts more applicants and makes it possible to raise the hiring standard and improve the productivity of the staff. Wages that optimize on the trade-off between the wage level and the productivity of the workforce are known as selection wages. As men react more strongly to wage differentials than females, the trade-off is more pronounced for men and a profit-maximizing firm will offer a higher wage for men than for women in equilibrium.
|Date of creation:||Sep 2009|
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- Alesina, Alberto F & Glaeser, Edward L & Sacerdote, Bruce, 2005.
"Work and Leisure in the US and Europe: Why So Different?,"
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