Standard models of equilibrium unemployment assume exogenous labour market institutions and flexible wage determination. This paper models wage rigidity and collective bargaining endogenously, when workers differ by observable skill and may adopt either individualised or collective wage...

This paper investigates the effect of displacement on reemployment wages of socially insured West German workers who became unemployed in 1986. Because detailed information on the cause of job loss is unavailable, displacement status is imputed using a probit estimated on the German...