Economics at your fingertips  

The Role of Expectation on Job Search and the Firm Size Effect on Wages

Takako Fujiwara‐Greve and Takako Fujiwara-Greve ()

The Japanese Economic Review, 2004, vol. 55, issue 1, 56-85

Abstract: We formulate dynamic games which give a rationale to the firm size–wage effect that the sheer firm size increases wages. We postulate that past wages of large firms are known to new employees, while those of small firms are not. Large firms can credibly induce workers to expect high future wages and reduce turnover, while small firms have no choice but to be myopic and pay low wages. The equilibrium wage differential obtains under the same worker characteristics and production function. We provide empirical evidence that workers’ expectations depend on firm size and affect wages as predicted by our model.

Date: 2004
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)

Related works:
Working Paper: The Role of Expectation in Job Search and Firm Size Effect on Wages (2000) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1352-4739

Access Statistics for this article

The Japanese Economic Review is currently edited by Akira Okada

More articles in The Japanese Economic Review from Japanese Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().

Page updated 2022-11-14
Handle: RePEc:bla:jecrev:v:55:y:2004:i:1:p:56-85