This article considers an equilibrium search model, where firms post wages using information on workers' employment status. Earnings differentials between workers of different employment statuses are driven by firms' ability to discriminate workers' reservation wages. I study how these wage...

We analyze the joint dynamics of prices, productivity, and employment across firms, building a dynamic equilibrium model of heterogeneous firms who compete for workers and customers in frictional labor and product markets. Using panel data on prices and output for German manufacturing firms, the...