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Wage Posting or Wage Bargaining? A Test Using Dual Jobholders

Author

Listed:
  • Marta Lachowska
  • Alexandre Mas
  • Raffaele Saggio
  • Stephen A. Woodbury

Abstract

We employ a revealed-preference test to distinguish between wage posting and wage bargaining in the labor market. Using a sample of dual jobholders in Washington State, we estimate the sensitivity of wages and separation rates to wage shocks in a secondary job. In lower parts of the wage distribution, improvements in the outside option lead to higher separations rates but not to higher wages, consistent with wage posting. In the highest wage quartile, improved outside options translate to higher wages, but not higher separation rates, consistent with bargaining. In the aggregate, bargaining appears to be a limited determinant of wage setting.

Suggested Citation

  • Marta Lachowska & Alexandre Mas & Raffaele Saggio & Stephen A. Woodbury, 2021. "Wage Posting or Wage Bargaining? A Test Using Dual Jobholders," NBER Working Papers 28409, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:28409
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    Cited by:

    1. Anikó Bíró & Márta Bisztray & João G. da Fonseca & Tímea Laura Molnár, 2023. "Accident-induced absence from work and wage ladders," IFS Working Papers W23/30, Institute for Fiscal Studies.
    2. Ilse Lindenlaub, 2022. "Comment on "Stubborn Beliefs in Search Equilibrium"," NBER Chapters, in: NBER Macroeconomics Annual 2022, volume 37, pages 298-313, National Bureau of Economic Research, Inc.
    3. Lachowska, Marta & Mas, Alexandre & Woodbury, Stephen A., 2022. "How reliable are administrative reports of paid work hours?," Labour Economics, Elsevier, vol. 75(C).
    4. Marcel Preuss & Germ'an Reyes & Jason Somerville & Joy Wu, 2025. "Are Elites Meritocratic and Efficiency-Seeking? Evidence from MBA Students," Papers 2503.15443, arXiv.org, revised Sep 2025.
    5. Pham, Tho & Schaefer, Daniel & Singleton, Carl, 2024. "Unequal Hiring Wages and Their Impact on the Gender Pay Gap," IZA Discussion Papers 17285, Institute of Labor Economics (IZA).
    6. repec:osf:socarx:bqjn2_v1 is not listed on IDEAS
    7. Dami'an Vergara, 2022. "Minimum Wages and Optimal Redistribution," Papers 2202.00839, arXiv.org, revised Dec 2022.
    8. Wolfgang Frimmel & Bernhard Schmidpeter & Rene Wiesinger & Rudolf Winter-Ebmer, 2022. "Mandatory Wage Posting, Bargaining and the Gender Wage Gap," Economics working papers 2022-02, Department of Economics, Johannes Kepler University Linz, Austria.
    9. Germán Reyes, 2024. "Coarse Wage-Setting and Behavioral Firms," CRC TR 224 Discussion Paper Series crctr224_2024_492, University of Bonn and University of Mannheim, Germany.
    10. Germ'an Reyes, 2022. "Coarse Wage-Setting and Behavioral Firms," Papers 2206.01114, arXiv.org, revised Mar 2024.
    11. Marta Lachowska & Alexandre Mas & Raffaele Saggio & Stephen A. Woodbury, 2023. "Work Hours Mismatch," NBER Working Papers 31205, National Bureau of Economic Research, Inc.
    12. Ahrens, Achim & Beerli, Andreas & Hangartner, Dominik & Kurer, Selina & Siegenthaler, Michael, 2023. "The Labor Market Effects of Restricting Refugees' Employment Opportunities," IZA Discussion Papers 15901, Institute of Labor Economics (IZA).
    13. Preuss, Marcel & Reyes, Germán & Somerville, Jason & Wu, Joy, 2025. "Are Elites Meritocratic and Efficiency-Seeking? Evidence from MBA Students," IZA Discussion Papers 17788, Institute of Labor Economics (IZA).
    14. Yuhong Du & Hazrul Shahiri, 2024. "Wage Bargaining Power of Internal Migrant Workers: Evidence from Urban Labor Market in China," SAGE Open, , vol. 14(2), pages 21582440241, June.
    15. Martin E. Andresen & Andreas R. Kostøl & Ross T. Milton & Corina Mommaerts & Luisa Wallossek, 2025. "Monthly Earnings Volatility and Household Pooling," NBER Working Papers 34563, National Bureau of Economic Research, Inc.
    16. Demir, Gökay, 2024. "Labor Market Frictions and Spillover Effects from Publicly Announced Sectoral Minimum Wages," IZA Discussion Papers 17510, Institute of Labor Economics (IZA).
    17. Amior, Michael & Stuhler, Jan, 2023. "Immigration, Monopsony and the Distribution of Firm Pay," CEPR Discussion Papers 18709, C.E.P.R. Discussion Papers.
    18. Ek, Simon & Fredriksson, Peter & Hensvik, Lena & Nordström Skans, Oskar, 2025. "Outside options and the sharing of match-specific rents," Working Paper Series 2025:17, IFAU - Institute for Evaluation of Labour Market and Education Policy.

    More about this item

    JEL classification:

    • J0 - Labor and Demographic Economics - - General
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts

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