Mismatch and Wage Posting

Frédéric Gavrel

Working Papers from HAL

Abstract: This paper provides a wage posting model of the labor market in which workers' search strategies are pure. To that end, the persistency of vacant jobs results from a mismatch problem, not a pure coordination problem. Since firms cannot commit to an output cutoff lower than the announced wage, laissez-faire is inefficient. Under a binding condition however, public policy can restore market efficiency by associating a minimum wage with a layoff tax.

Keywords: Posted wages; Mismatch; Efficiency; Minimum wage; Layoff tax (search for similar items in EconPapers)
Date: 2018-09-30
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01884213
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