This paper studies a labor market with directed search, where multi-worker firms follow a firm wage policy: They pay … equally productive workers the same. The policy reduces wages, due to the influence of firms’ existing workers on their wage … applications, I first show that firm wages dampen wage variation over the business cycle, amplifying that in unemployment, with …

To explain potential sources of wage rigidity this article analyzes a model of reciprocalkindness applied to a repeated … compatible with the rentsharingapproach to wage rigidity. Wages adjust to‘market pressure’ but are less flexible when employees …

workers with limited ability to smooth consumption. I show that this leads to a form of equilibrium wage rigidity, as the … wage offers, and hence also the offers that employers find profitable to make. In the model risk-averse entrepreneurs use …

: workplace skill segregation, gradual promotions, wage increases that have no relation with productivity and downward wage … considered in their theoretical and empirical models. -- envy ; interdependent preferences ; skill segregation ; wage dynamics … ; wage dispersion ; internal labor market ; recursive contracts …

, 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 …

, 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 …

can commit to wage contracts but cannot commit not to replace incumbent workers. Workers are risk averse, so that there …