Diaz-Vazquez, Pilar; Snower, Dennis J. - C.E.P.R. Discussion Papers - 2002
Do firms reduce employment when their insiders (established, incumbent employees) claim higher wages? The conventional … employees (entrants) receive their reservation wages. The reason given is that an increase in insider wages gives rise to a … conventional answer. We show that, in the context of a stochastic model of the labor market, an increase in insider wages promotes …