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Labor market institutions, via their effect on the wage structure, affect the investment decisions of firms in labor markets with frictions. This observation helps explain rising wage inequality in the US, but a relatively stable wage structure in Europe in the 1980s. These different trends are...
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Empirical observations show that education helps to protect against labor market risks. This is twofold: The higher educated face a higher expected wage income and a lower probability of being unemployed. Although this relationship has been analyzed in the literature broadly, several questions...
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We explore the impact of wage adjustment on employment with a focus on the role of downward nominal wage rigidities. We … results point to a negative effect of downward wage rigidities on employment at the firm level …
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the share of the outsourced workforce is not too large, this wage moderation effect on domestic employment outweighs the … direct substitution effect so that domestic employment increases in unionized firms as outsourcing costs fall. This does not … for employment. However, except for low outsourcing activities, the impact of these policy measures will become smaller as …
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