The Pricing of Job Characteristics When Markets Do Not Clear: Theory and Implications
This paper examines nonsequential search when jobs vary with respect to nonpecuniary characteristics. In the presence of frictions in the labor market, the equilibrium job distribution need not show evidence of compensating wage differentials. The model also generates several pervasive features of labor markets: unemployment and vacancies, apparent discrimination, and market segmentation. When workers are homogeneous, restrictions on the range of job offers decrease welfare and cannot reduce unemployment. However, when workers have heterogeneous preferences, such restrictions may lower unemployment and can even lead to a Pareto-improvement in welfare. We consider the impact of policies banning discrimination, regulating working-conditions and imposing a minimum wage.
|Date of creation:||Aug 2003|
|Publication status:||published as Lang, Kavin and Sumon Majumdar. "The Pricing Of Job Characteristics When Markets Do Not Clear: Theory And Policy Implications," International Economic Review, 2004, v45(4,Nov), 1111-1128.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Sattinger, Michael, 1979. "Differential Rents and the Distribution of Earnings," Oxford Economic Papers, Oxford University Press, vol. 31(1), pages 60-71, March.
- Victor R. Fuchs & Alan B. Krueger & James M. Poterba, 1998. "Economists' Views about Parameters, Values, and Policies: Survey Results in Labor and Public Economics," Journal of Economic Literature, American Economic Association, vol. 36(3), pages 1387-1425, September.
- Lucas, Robert E B, 1975. "Hedonic Price Functions," Economic Inquiry, Western Economic Association International, vol. 13(2), pages 157-178, June.
- Hosios, Arthur J, 1986. "Layoffs, Recruitment, and Interfirm Mobility," Journal of Labor Economics, University of Chicago Press, vol. 4(4), pages 473-502, October.
- Burdett, Kenneth & Mortensen, Dale T, 1998. "Wage Differentials, Employer Size, and Unemployment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(2), pages 257-273, May.
- Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
- Hwang, Hae-shin & Mortensen, Dale T & Reed, W Robert, 1998. "Hedonic Wages and Labor Market Search," Journal of Labor Economics, University of Chicago Press, vol. 16(4), pages 815-847, October.
- Rosen, Sherwin, 1987. "The theory of equalizing differences," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 1, chapter 12, pages 641-692 Elsevier.
- Charles Brown, 1980. "Equalizing Differences in the Labor Market," The Quarterly Journal of Economics, Oxford University Press, vol. 94(1), pages 113-134.
- Gerard R. Butters, 1977. "Equilibrium Distributions of Sales and Advertising Prices," Review of Economic Studies, Oxford University Press, vol. 44(3), pages 465-491.
- Altonji, Joseph G & Paxson, Christina H, 1988.
"Labor Supply Preferences, Hours Constraints, and Hours-Wage Trade-Offs,"
Journal of Labor Economics,
University of Chicago Press, vol. 6(2), pages 254-276, April.
- Joseph G. Altonji & Christina H. Paxson, 1987. "Labor Supply Preferences, Hours Constraints, and Hours-Wage Tradeoffs," NBER Working Papers 2121, National Bureau of Economic Research, Inc.
- Kevin Lang, 1991. "Persistent Wage Dispersion and Involuntary Unemployment," The Quarterly Journal of Economics, Oxford University Press, vol. 106(1), pages 181-202. Full references (including those not matched with items on IDEAS)