The paper shows that for severe enough search frictions, a market for employed workers with wage gains emerges despite the presence of adverse selection. Asymmetric information about a worker's productivity between the worker's current employer and the outside market enables the current employer...

This paper extends the equilibrium search model of Burdett and Mortensen by introducing two different occupations. Local monopsony power and the complementarity of the occupations in production imply that firms occupy the same position in the wage distribution of each occupation. The model also...

The literature on firm-financed general training after Becker tried to explain the firmst incentive to invest in general training by looking at labour market ftictions. These friction were not only taken to explain the existence of firm-financed general training but were -- besides the workers'...