Selection Wages: An Illustration

Offering higher wages may enable firms to attract more applicants and screen them more carefully. If firms compete in this way in the labor market, "selection wages" emerge. This note illustrates this wage-setting mechanism. Selection wages may engender unconventional results, such as a pre-tax wage compression induced by the introduction of a progressive wage tax.

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Year of publication:	2006-12
Authors:	Schlicht, Ekkehart
Institutions:	Volkswirtschaftliche Fakultät, Ludwig-Maximilians-Universität München
Subject:	wage formation \| efficiency wage \| incentive wage \| mobility \| job-specific pay \| wage-tax

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Extent:	application/pdf
Series:	Discussion Papers in Economics.
Type of publication:	Book / Working Paper
Language:	English
Classification:	J31 - Wage Level and Structure; Wage Differentials by Skill, Training, Occupation, etc ; J41 - Contracts: Specific Human Capital, Matching Models, Efficiency Wage Models, and Internal Labor Markets ; J62 - Occupational and Intergenerational Mobility ; J63 - Turnover; Vacancies; Layoffs
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005649795