, the government faces recruitment problems. The optimal steady-state wage premium depends mainly on the labour market … the optimal policy can increase the volatility of unemployment significantly. Public sector wage and employment shocks … have mixed effects on unemployment. A wage shock raises the unemployment rate, while a reduction in the separations lowers …

differential wage responses to economic shocks. We offer three explanations for these findings: An equilibrium search model, where …

The aggregate average wage is often used as an indicator of economic performance and welfare, and as such often serves … as a benchmark for changes in the generosity of public transfers and for wage negotiations. Yet if economies experience a … and the end of 2002. We show that about a quarter of the growth in the average wage during this period could be attributed …

variabilities but also generates strongly countercyclical unemployment rates. With some wage rigidity the model also matches …

-minimizing government acts with a wage schedule that does not equate supply and demand. Second, our economy features heterogeneity across … public-sector wage differential and excess underemployment account for 15 percent of the education bias, with the remaining … accounted for by technology. In a counterintuitive fashion, we find that more wage compression in the public sector raises …

This paper studies the price and employment response of firms to the introduction of a nation-wide minimum wage in …