Social Preferences, Skill Segregation and Wage Dynamics
Antonio Cabrales (),
Antoni Calvó-Armengol and
Nicola Pavoni ()
No 181, Working Papers from Barcelona Graduate School of Economics
We study the earning structure and the equilibrium assignment of workers to firms in a model in which workers have social preferences and skills are perfectly substitutable in production. We allow firms to offer long terms contracts and for frictions in the labour market in the form of mobility costs. For low moving costs between firms, heterogeneous productivities lead to widespread workplace skill segregation and the whole market wage dispersion is explained by between firms differences. In a labor market with intermediate levels of mobility costs, segregation is more moderate and wage dispersion arises both within and across firms. For high levels of moving costs the whole wage dispersion is within the firm, and becomes zero when the moving costs are sufficiently high. We show that long terms contracts in the presence of social preferences associate within-firm wage dispersion with novel "internal labor market" features such as a dynamic form of wage compression, gradual promotions, and wage non-monotonicity.
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Journal Article: Social Preferences, Skill Segregation, and Wage Dynamics (2008)
Working Paper: Social Preferences, Skill Segregation and Wage Dynamics (2007)
Working Paper: Social Preferences, Skill Segregation, and Wage Dynamics (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bge:wpaper:181
Access Statistics for this paper
More papers in Working Papers from Barcelona Graduate School of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Bruno Guallar ().