We improve the precision of the test of the implicit contract model that Beaudry and DiNardo proposed twenty years ago. Our data set allows us to define the precise industry and plant of a particular employment relationship, link local labour market characteristics and company characteristics to...

Consider a labour market with heterogeneous workers. Firms recruit workers by fixing a hiring standard and a wage offer simultaneously. A more demanding hiring standard necessitates a better wage offer in order to attract enough qualified applicants. As a result, an efficiency wage effect is...

This paper presents a general-equilibrium model of endogenous skilled-biased technological change and matching unemployment in a disaggregated economy. We simultaneously endogenise both the direction and pace of technological change as well as the unemployment rates. We show that an increase in...

Consider a labour market with heterogeneous workers. Firms recruit workers by fixing a hiring standard and a wage offer simultaneously. A more demanding hiring standard necessitates a better wage offer in order to attract enough qualified applicants. As a result, an efficiency wage effect is...

Economists disagree about the factors driving the substantial increase in residual wage inequality in the U.S. over the past few decades. We identify and estimate a general model of log wage residuals that incorporates: (i) changing returns to unobserved skills, (ii) a changing distribution of...

Assuming that immigrants select destinations according to absolute returns to their observable and unobservable human capital, I present a human capital model of migration accounting for taxes, transfers and limited portability of skills. The model predicts both segmented sorting of migrants to...