In this paper, we explore employers' decisions regarding the employment of legal and illegal immigrants in the presence of endogenous adjustment cost, minimum wages and an enforcement budget. We show that increasing the employment of legal foreign workers will increase the number of illegal...

According to the previous literature on hiring, ?rms face a trade-off when deciding on external recruiting: From an incentive perspective, external recruiting is harmful since admission of external candidates reduces internal workers’ career incentives. However, if external workers have high...

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...

This study discriminates FDI technology spillover from learning effects. Whenever learning takes time, our model predicts that foreign investors deduct the economic value of learning from wages of inexperienced workers and add it to experienced ones to prevent them from moving to local...

EU enlargement offers significant welfare gains to old and new member states. However, these welfare gains do not come automatically but have to be earned by appropriate adjustments in domestic policies. This is particularly relevant for Germany's New Laender, which could benefit from the...

This paper analyses the relationship between education, gender and earnings in France and Germany. The model chosen here enables to estimate the impact of education not only on the expected earnings level but also on their dispersion, taking gender-specific sample selectivity into account. The...

This paper investigates the functioning of regional labour markets in Italy and Germany for different employee groups. In the light of high and persistent differences in unemployment and wage rates between the North and South of Italy and the West and East of Germany, we first derive theoretical...

Prominent reasons why people make more or less money in the labor market include personal characteristics of the employee (e.g., human capital), job characteristics, and characteristics of the employer (e.g., firm size). An emerging empirical literature suggests that one hitherto overlooked firm...

Der Artikel untersucht die Lohnstruktur westdeutscher Arbeitnehmer von 1984 bis 2007 auf Basis des Sozio-oeconomischen Panels (SEOP). Bis Mitte der Neunziger Jahre war die Lohnstruktur stabil, ab 1995 steigt die Lohnungleichheit an, allerdings nur in der unteren Hälfte der Einkommensverteilung....

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...