EconPapers    
Economics at your fingertips  
 

How Sticky Wages in Existing Jobs can affect Hiring

Yongsung Chang (), Sun-Bin Kim () and Mark Bils
Additional contact information
Mark Bils: U. of Rochester

No 1162, 2013 Meeting Papers from Society for Economic Dynamics

Abstract: We consider a matching model of employment with wages that are flexible for new hires, but sticky within matches. We depart from standard treatments of sticky wages by allowing worker effort to respond to the wage being too high or low, rendering the effective wage (wage divided by output) more flexible. Shimer (2004), Pissarides (2009), and others have illustrated that employment in the Mortensen-Pissarides model does not depend on the degree of wage flexibility in existing matches. But this is not true in our model. If wages of matched workers are stuck too high in a recession, then firms will require they provide more effort. In turn, this lowers the value of additional labor, reducing new hiring.

Date: 2013
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://economicdynamics.org/meetpapers/2013/paper_1162.pdf (application/pdf)

Related works:
Working Paper: How Sticky Wages In Existing Jobs Can Affect Hiring (2016) Downloads
Working Paper: How Sticky Wages in Existing Jobs Can Affect Hiring (2014) Downloads
Working Paper: How Sticky Wages In Existing Jobs Can Affect Hiring (2014) 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: https://EconPapers.repec.org/RePEc:red:sed013:1162

Access Statistics for this paper

More papers in 2013 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().

 
Page updated 2019-04-18
Handle: RePEc:red:sed013:1162