We argue that the arrival of immigrants with low reservation wages can strengthen the monopsony power of firms. Firms can exploit "cheap" migrant labor by offering lower wages, though at the cost of forgoing potential native hires who demand higher wages. This monopsonistic trade-off can lead to...

This paper studies wage effects and job mobility as a result of skill mismatch in worker- occupation pairs. I develop a Roy model in which learning on the job induces workers to shift more time towards job-specific activities. Using a short task panel containing data on worker’s time...

We develop an equilibrium model where risk-averse agents can choose between employment and entrepreneurship. An important property of our framework is that the effort of agents is not observable (moral hazard), so that optimal employment contracts must be incentive compatible. In equilibrium we...

China has been accused exchange rate manipulation that has caused large U.S. trade deficits, which have reduced U.S. welfare by increasing unemployment and reducing wages. In addition, the strong claims by some observers that the trade imbalances are deeply deleterious to China's welfare almost...

Expectations and riskiness of future earnings are crucial determinants of individuals' intertemporal choices. Yet, the empirical literature lacks reliable measures of the distribution of future income. Lacking direct observability, the latter is usually estimated inferring the mean, the variance...

Wages and productivity represent two of the most relevant variables to consider in economic development. Given the low productivity levels that emerging countries reveal, the accumulation of productive capabilities and a narrower dispersion across sectors would enable emerging countries to...

I analyze the spillover effects of publicly announced sectoral minimum wages in Germany. My identification strategy exploits exposure to sectoral minimum wages across workers and industries outside the minimum wage sector in a triple differences estimation. Subminimum wage workers in related...

One of the factors likely to affect the market power of employers is the sensitivity of the flow of recruits to the offered wage, but there is very little research on this. This paper presents a methodology for estimating the wage elasticity of recruitment and applies it to German data. Our...

This paper presents an inter-generational, dynamic model of household wealth that demonstrates the endogeneity among the black-white gaps in wages, income and wealth. The model shows that because households with less wealth have more inelastic labor supply, monopsony-employers can use race to...

The literature has shown that the overall efficiency of exogenously imposed tournaments is reduced by a high variance in performance. This paper reports results from an experiment analyzing whether allowing subjects to self-select into different payment schemes is reducing the variability of...