On the informational content of wage offers

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Baç, Mehmet (2002) On the informational content of wage offers. International economic review, 43 (1). pp. 173-193. ISSN 0020-6598

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Official URL: http://dx.doi.org/10.1111/1468-2354.t01-1-00008


This article investigates signaling and screening roles of wage offers in a single-play matching model with two-sided unobservable characteristics. It generates the following predictions as matching equilibrium outcomes: (i) “good” jobs offer premia if “high-quality” worker population is large; (ii) “bad” jobs pay compensating differentials if the proportion of “good” jobs to “low-quality” workers is large; (iii) all firms may offer a pooling wage in markets dominated by “high-quality” workers and firms; or (iv) Gresham’s Law prevails: “good” types withdraw if “bad” types dominate the population. The screening/signaling motive thus has the potential of explaining a variety of wage patterns.

Item Type:Article
Subjects:H Social Sciences > HD Industries. Land use. Labor
ID Code:282
Deposited By:Mehmet Baç
Deposited On:05 Apr 2007 03:00
Last Modified:17 Sep 2019 15:09

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