On the informational content of wage offers

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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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
Divisions: Faculty of Arts and Social Sciences
Depositing User: Mehmet Baç
Date Deposited: 05 Apr 2007 03:00
Last Modified: 17 Sep 2019 15:09
URI: https://research.sabanciuniv.edu/id/eprint/282

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