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Minimum Wages, Capital Accumulation and Worker's Incomes

Economides, George - 2014

Using an intertemporal model of saving and capital accumulation we demonstrate that it is impossible for any binding minimum wage to increase the after-tax incomes of workers if the production function is Cobb-Douglas with constant returns to scale, or if there are no differences in ability...

Persistent link: https://www.econbiz.de/10013052016

Endogenous Wage Indexation and Aggregate Shocks

Carrillo, Julio A. - 2014

Empirical and institutional evidence finds considerable time variation in the degree of wage indexation to past inflation, a finding that is at odds with the assumption of constant indexation parameters in most New-Keynesian DSGE models. We build a DSGE model with endogenous wage indexation in...

Persistent link: https://www.econbiz.de/10013052090

The Return to College : Selection Bias and Dropout Risk

Hendricks, Lutz - 2014

This paper estimates the effect of graduating from college on lifetime earnings. Motivated by the fact that nearly half of all college students fail to earn a bachelor's degree, we study a model of risky college completion. The central idea is that students drop out of college mainly because...

Persistent link: https://www.econbiz.de/10013054498

Insurance in Human Capital Models with Limited Enforcement

Krebs, Tom; Kuhn, Moritz; Wright, Mark L. J. - 2021

This paper develops a tractable human capital model with limited enforceability of contracts. The model economy is populated by a large number of long-lived, risk-averse households with homothetic preferences who can invest in risk-free physical capital and risky human capital. Households have...

Persistent link: https://www.econbiz.de/10013315494

Dismissal Disputes and Endogenous Sorting

Garibaldi, Pietro; Pfann, Gerard A. - 2021

Dismissal disputes occur mostly in recessions and often lead to long and costly contract termination procedures. This paper investigates how dispute procedures may affect the job-matching process. First we present a simple accounting framework that corresponds with general dismissal legislation,...

Persistent link: https://www.econbiz.de/10013315541

Minimum Wages as a Redistributive Device in the Long Run

Economides, George; Moutos, Thomas - 2021

This paper analyzes long run outcomes resulting from adopting a binding minimum wage in a neoclassical model with perfectly competitive labour markets and capital accumulation. The model distinguishes between workers of heterogeneous ability and capitalists who do all the saving, and it entails...

Persistent link: https://www.econbiz.de/10013315566

Cyclical Unemployment, Structural Unemployment

Diamond, Peter A. - 2021

Whenever unemployment stays high for an extended period, it is common to see analyses, statements, and rebuttals about … the extent to which the high unemployment is structural, not cyclical. This essay views the Beveridge Curve pattern of … unemployment and vacancy rates and the related matching function as proxies for the functioning of the labor market and explores …

Persistent link: https://www.econbiz.de/10013315812

Monetary Persistence and the Labor Market : A New Perspective

Lechthaler, Wolfgang; Merkl, Christian; Snower, Dennis J. - 2021

sluggish. Job creation and job destruction are negatively correlated. And the volatility of unemployment is much larger than in …

Persistent link: https://www.econbiz.de/10013316264

Real Convergence, Capital Flows, and Competitiveness in Central and Eastern Europe

Belke, Ansgar Hubertus; Schnabl, Gunther; Zemanek, Holger - 2021

The paper scrutinizes the role of wages and capital flows for competitiveness in the new EU member states in the context of real convergence. For this purpose it extends the seminal Balassa-Samuelson model by international capital markets. The augmented Balassa-Samuelson model is linked to the...

Persistent link: https://www.econbiz.de/10013316298

Incentive Contracts and Efficient Unemployment Benefits

Demougin, Dominique; Helm, Carsten - 2021

Several European countries have reformed their labor market institutions. Incentive effects of unemployment benefits … have been an important aspect of these reforms. We analyze this issue in a principal-agent model, focusing on unemployment … levels and labor productivity. In our model, a higher level of unemployment benefits improves the works position in wage …

Persistent link: https://www.econbiz.de/10013316365