We consider the economic implications of a compressed wage structure which is exogenously determined by institutions. An important feature of our analysis is that human capital is endogenous and can be achieved either as formal education or as informal training within firms after entering the...

In the presence of increasing specialization of workers it becomes more and more difficult for firms to find the most suitable workers. In such an environment a multinational corporation has an advantage because it can exchange workers between plants in different countries. In this way it can...

Wage Dispersion and Efficiency. It is often assumed that markets generate efficient allocations, but these are not necessarily fair. The widening of wage differentials that is currently observed is interpreted in this manner: Skill-biased technological progress increases demand for skilled work...