This paper presents results on the stability of the wage dispersion model presented in Mortensen (2003). Specifically, we test four 'positive definite' learning processes on a single parameterisation of the underlying model, and submit the most successful to a thorough sensitivity analysis. The...

We discuss a model of a job market where firms announce salaries. Thereupon, they decide through the evaluation of a productivity test whether to hire applicants. Candidates for a job are locked in once they have applied at a given employer. Hence, such a market exhibits a specific form of the...

This discussion paper resulted in an article in the 'American Economic Review' (2006). Volume 96, issue 2, pages 270-274.<P> Empirical studies of labor markets show that social contacts are an important source of job-related information [Ioannides and Loury (2004)]. At the same time, wage...</p>

The German model of co-determination (Mitbestimmung) with works councils, in which workers are involved in the management of a company, was a role model for other countries for many years. However, since the 1990s the appeal of works councils has been declining, to the extent that now even...

In the paper, we simulate a heterogeneous-agent version of the wage-posting model as derived by Montgomery (1991) with homogeneous workers and differently-productive employers. Wage policy of particular employer is positively correlated with employer’s productivity level and the wage policy of...

The Swedish adult education program known as the Knowledge Lift (1997-2002) was unprecedented in its size and scope, aiming to raise the skill level of large numbers of low-skill workers. This paper evaluates the potential effects of this program on aggregate labor market outcomes. This is done...

Aufbauend auf der Hypothese, dass Arbeitsmärkte durch unvollständige Information charakterisiert sind, werden in diesem Arbeitspapier neuere Entwicklungen innerhalb eines Zweiges informationsökonomischer Ansätze vorgestellt: der Suchtheorie. Dabei werden ausführlich insbesondere jene...

Wage inequality in the United States has grown substantially in the past two decades. Standard supply-demand analysis in the empirics of inequality (e.g. Katz and Murphy (1992)) indicates that we may attribute some of this trend to an outward shift in the demand for high skilled labor. In this...

A rich but tractable variant of the Burdett-Mortensen model of wage setting behavior is formulated and a dynamic market equilibrium solution to the model is defined and characterized. In the model, firms cannot commit to wage contracts. Instead, the Markov perfect equilibrium to the wage setting...

Despite its long tradition the practice of releasing star players for association matches without compensating the clubs has become increasingly controversial. The clubs claim that their players play in the tournaments organized by the associations while earning club money. However, the clubs do...