Recent empirical contributions in labor economics suggest that individual firms face upward sloping labor supplies. We rationalize this by assuming that idiosyncratic non-pecuniary conditions interact with money wages in workers’ decisions to work for specific firms. Likewise, firms supply...

We introduce firm and worker heterogeneity into a model of innovation-driven endogenous growth. Individuals who differ in ability sort into either a research sector or a manufacturing sector that produces differentiated goods. Each research project generates a new variety of the differentiated...

Most developed countries have experienced rising wage inequality and falling wage shares, which are often blamed on the same forces - globalisation, technical change, and weakening labour market institutions. This paper shows, however, that wage inequality has risen the most in those countries...

This paper offers a unique quantitative evaluation of the distribution of the welfare of a water privatization experience in Mali among labor, investors, intermediate input providers, users and taxpayers. The assessment is based on indicator duality and production theory. The paper shows that...

We develop an equilibrium search-matching model with risk-neutral agents and two-sided ex-ante heterogeneity. Unemployment insurance has the standard effect of reducing employment, but also helps workers to get a suitable job. The predictions of our simple model are consistent with the...

Mobility of workers involves flows of labour, human capital and other production factors and thus contributes to a more efficient allocation of resources. Besides these effects on allocative efficiency, migrant flows affect relative wages and also change the international and national...

This paper surveys major empirical regularities concerning changes in earnings inequality in Europe and the US over the past 25 years. Next, it indicates which of these regularities can be explained within the competitive demand-supply framework of analysis and what is left unexplained. Finally,...

This paper uses a price-leadership model of the international vanilla market to study the welfare consequences of alternative pricing policies for Madagascar – a country that controls domestic production through a single-channel marketing system and is the leader in the vanilla market....

A basic tenet of economic science is that productivity growth is the source of growth in real income per capita. But our results raise doubts by creating a direct link between macro productivity growth and the micro evolution of the income distribution. We show that over the entire period...

We analyze the distribution and concentration of market incomes in Germany in the period 1992 to 2001 on the basis of an integrated data set of individual tax returns and the German Socio-Economic Panel. The unique feature of this integrated data set is that it encompasses the whole spectrum of...