Ioannides, Yannis M.; Pissarides, Christopher A. - In: Bell Journal of Economics 14 (1983) 2, pp. 573-580
We examine wages and employment for junior and senior workers when seniority is firm-specific. We show that if workers are risk averse, the firm chooses both the junior and senior wage independently of the wage offers received by its workers from other firms. Junior workers are paid less than...