Wage Competition with Heterogeneous Workers and Firms

Jonathan Hamilton, Jacques Thisse and Yves Zenou

No 2141, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We study imperfect competition in the labor market when worker skills are continuously distributed within the population and a finite number of firms have different job requirements. The cost of training a worker depends on the difference between this worker's skill and the employer's needs. When firms cannot identify worker training costs in advance, firms pay workers equal wages, but workers absorb training costs. When firms can identify worker types before employment, firms can pay different net wages to workers with different training costs. Voters select the level of general education which is financed by a lump-sum tax. Workers are on average better off when firms can observe workers' skill for a given level of human capital, but the median voter prefers a higher level of general human capital when firms cannot observe worker types.

Keywords: Information Structure; Job Assignment; Median Voter; Wage Competition (search for similar items in EconPapers)
JEL-codes: I22 J41 (search for similar items in EconPapers)
Date: 1999-05
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=2141 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: Wage Competition with Heterogeneous Workers and Firms (2000)
Working Paper: Wage competition with heterogeneous workers and firms (2000)
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: https://EconPapers.repec.org/RePEc:cpr:ceprdp:2141

Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... ers/dp.php?dpno=2141

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().