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A Theory of Wage Adjustment Under Loss Aversion

Ahrens, Steffen - 2015

price. Firms adjust wages flexibly in response to variations in labor demand. The resulting theory of wage adjustment is … starkly at variance with past theories. In line with the empirical evidence, we find that (1) wages are completely rigid in … response to small labor demand shocks, (2) wages are downward rigid but upward flexible for medium sized labor demand shocks …

Persistent link: https://www.econbiz.de/10013030342

Endogenous Monopsony and the Perverse Effect of the Minimum Wage in Small Firms

Danziger, Leif - 2021

The minimum wage rate has been introduced in many countries as a means of alleviating the poverty of the working poor. This paper shows, however, that an imperfectly enforced minimum wage rate causes small firms to face an upward-sloping labor supply schedule. Since this turns these firms into...

Persistent link: https://www.econbiz.de/10013316334

Two-Way Migration between Similar Countries

Kreickemeier, Udo - 2015

We develop a model to explain two-way migration of high-skilled individuals between countries that are similar in their economic characteristics. High-skilled migration results from the combination of workers whose abilities are private knowledge, and a production technology that gives...

Persistent link: https://www.econbiz.de/10013010487

Minimum Wages and the Labor Market Effects of Immigration

Edo, Anthony - 2017

We exploit the non-linearity in the level of minimum wages across US States created by the coexistence of federal and … state regulations to investigate how minimum wages affect the labor market impact of immigration. We find that the effects ….S. States with low minimum wages (i.e., where the federal minimum wage is binding). The results are robust to instrumenting …

Persistent link: https://www.econbiz.de/10012951556

The Bazaar Effect, Unbundling of Comparative Advantage, and Migration

Kohler, Wilhelm - 2007

with high-skilled and low-skilled labor. I address wage and welfare effects under flexible wages, and under a minimum wage …

Persistent link: https://www.econbiz.de/10012777491

Can Minimum Wages Raise Workers' Incomes in the Long Run?

Economides, George - 2016

below what they would earn in the absence of minimum wages. Moreover, we establish that in the absence of a separate class … of agents (i.e. capitalists) minimum wages cannot increase the incomes of employed workers even when there are decreasing …

Persistent link: https://www.econbiz.de/10012988396

Simultaneous Search and Network Efficiency

Gautier, Pieter - 2011

When workers send applications to vacancies they create a network. Frictions arise if workers do not know where other workers apply to (this affects network creation) and firms do not know which candidates other firms consider (this affects network clearing). We show that those frictions and the...

Persistent link: https://www.econbiz.de/10013122129

Restrictive Immigration Policy in Germany : Pains and Gains Foregone?

Felbermayr, Gabriel; Geis, Wido; Kohler, Wilhelm - 2021

Many European countries restrict immigration from new EU member countries. The rationale is to avoid adverse wage and employment effects. We quantify these effects for Germany. Following Borjas (2003), we estimate a structural model of labor demand, based on elasticities of substitution between...

Persistent link: https://www.econbiz.de/10013316525

Firm Response to Competitive Shocks : Evidence from China's Minimum Wage Policy

Hau, Harald - 2017

The large regional variation in minimum wage levels in the period 2002-08 in China implies that Chinese manufacturing firms experienced competitive shocks as a function of firm location and their low-wage employment share. We find that minimum wage hikes accelerate the input substitution from...

Persistent link: https://www.econbiz.de/10012947448

Slow to Hire, Quick to Fire : Employment Dynamics with Asymmetric Responses to News

Ilut, Cosmin L. - 2017

Concave hiring rules imply that firms respond more to bad shocks than to good shocks. They provide a unified explanation for several seemingly unrelated facts about employment growth in macro and micro data. In particular, they generate countercyclical movement in both aggregate conditional...

Persistent link: https://www.econbiz.de/10012956881