How important is imperfect competition in the product market for employment dynamics? To investigate this, we formulate a model of employment adjustment with search frictions, vacancy costs, hiring costs, and imperfect competition in the product market. From this model, we derive a structural...

The authors formulate a stochastic infinite-horizon insider-outsider model that is solved explicitly and used to investigate the consequences of alternative 'seniority' rules for wage and employment determination. The model is simple enough to allow analysis of several different institutional...

This paper addresses the question of the relative importance of firm-specific factors in wage determination in a sample of Swedish manufacturing firms. The main result is that firm productivity has a small but significant effect on wages over and above the influence of aggregate factors, the...