We develop a methodology for identifying departures from relative factor price equality across regions that is valid under general assumptions about production, markets and factors. Application of this methodology to the United States reveals substantial and increasing deviations in relative...

This Paper takes a new look at the long-run dynamics of inflation and unemployment in response to permanent changes in the growth rate of the money supply. We examine the Phillips curve from the perspective of what we call ‘frictional growth’, i.e. the interaction between money growth and...

Based on a rich personnel data set of a large university we find strong evidence for the existence of an internal labor market. First, the lowest academic rank is a strong port of entry and the highest rank is a port of exit. Second, wages do not follow external wage developments, since they...

Unemployment insurance systems include monitoring of unemployed workers and punitive sanctions if job search requirements are violated. We analyze the effect of sanctions on the ensuing job quality, notably on wage rates and hours worked, and we examine how often a sanction leads to a lower...

Standard economic models suggest that adverse demand shocks will lead to bigger employment losses if institutional factors like minimum wages or trade unions prevent real wages from declining. Some analysts have argued that this insight explains the dichotomy between the United States, where...

Recent studies found evidence for nominal wage rigidity during periods of relatively high nominal GDP growth. It has been argued, however, that in an environment with low nominal GDP growth, when nominal wage cuts become customary, workers’ opposition to nominal cuts would erode and, hence,...

This Paper attempts to reconcile two apparently contradictory trends in the UK labour market over the 1980s and 1990s. While wage differentials based on observed skill have risen for men, wage differentials between men and women have fallen. If women earn less than men because they are less...

In this Paper, I present direct micro-econometric evidence of the relation between individual wages of French workers and the import behaviour of their employing firms. First, a model shows that the impact of firms’ imports on workers’ wages not only comes from movements in the quasi-rent...

It is well known in personnel economics that firms may improve the quality of their workforce by offering performance pay. We analyse an equilibrium model where worker productivity is private information and show that the gains to the firms from worker self-selection may not be matched by a...