An important policy issue is whether the National Minimum Wage (NMW) introduced in Britain in April 1999, is a stepping stone to higher wages or traps workers in a low-wage no-wage cycle. In this paper we utilise the longitudinal element of the Labour Force Survey over the period 1999 to 2003 to...

Workers wrongly anchor their beliefs about outside options on their current wage. In particular, low-paid workers underestimate wages elsewhere. We document this anchoring bias by eliciting workers' beliefs in a representative survey in Germany and comparing them to measures of actual outside...

Decomposing wages into worker and firm wage components, we find that firm-fixed components (firm rents) are sizeable parts of workers' wages. If workers can only imperfectly observe the extent of firm rents in their wages, they might be mislead about the overall wage distribution. Such...

"As in many other countries, government policy in the UK has the objective of raising the participation rate of young people in higher education, while increasing the share of the costs of higher education paid by students themselves. A rationale for the latter element comes from evidence of a...

We study the long-run effects of initial labor market conditions on wages for a large sample of male individuals entering the Austrian labor market between 1978 and 2000. We find a robust negative effect of unfavorable entry conditions on starting wages. This initial effect turns out to be quite...

This paper introduces a method for estimating workers' marginal willingness to pay for job attributes employing data on job search activity. Worker's willingness to pay to avoid a temporary contract, which increases the risk of becoming unemployed, is derived for Lithuania. The empirical...

The paper estimates how wages respond to changes in regional unemployment using detailed Swedish micro data. The study is set in an economy with close to complete union coverage where real wages have grown continuously in all parts of the wage distribution for the past 15 years, and where the...

This paper reviews empirical research on finance and labour markets. Preliminary themes in the literature follow. Finance may interact with labour market institutions to jointly determine labour outcomes. Highly leveraged firms show greater employment volatility during cyclical fluctuations, and...

This paper explores the short-and long-term effects on wages of absence from work for young highly attached skilled male and female workers in West Germany. The analysis distinguishes different types of career absence: unemployment, maternity leave for female workers, compulsory service for male...