The strong wage effects related to mismatches between a workers education and that required in the job are usually attributed to assignment theory. This theory asserts that productivity and wages depend on the education-job match, which determines the utilization of skills. However, recent...

This paper employs a unit cost function to investigate the impacts of aggregate imports on the demand for skilled and unskilled labour in Australia. Similar to Tombazos (1999b), I use a model that focuses on the displacement effects of the Stolper-Samuelson variety, as well as recognizes the...

Although economists have developed a series of approaches to modelling the existence of labour market discrimination, rarely is this topic examined by analysing self-report survey data. After reviewing theories and empirical models of labour market discrimination, we examine self-reported...

This paper exploits data from the German Socio-Economic Panel (SOEP) to re-examine the gender wage gap in Germany on the basis of inequality-adjusted measures of wage differentials which fully account for gender differences in pay distributions. The inequality-adjusted gender pay gap measures...

It is well known that smoking leads to lower wages. However, the mechanism of this negative relationship is not well understood. This analysis includes a decomposition of the wage gap between smokers and nonsmokers, with a variety of definitions of smoking status designed to reflect differences...

This paper extends the search with discrimination framework by introducing jobs that are constrained by equal wage policies, and endogenous job destruction that creates Becker-like competitive pressure on prejudiced firms. The model predicts a number of stylized facts observed in the U.S. labor...

Informal contacts are extensively used by both firms and workers to find jobs and fill vacancies. The common wisdom in the economic literature is that jobs created through this channel are of better quality and pay higher wages than jobs created through formal methods. This paper explores the...

This paper studies the impact of NAFTA on informality and real wages in Mexico. Using a dynamic industry model with firm heterogeneity, it is predicted that import tariff elimination could reduce the incidence of informality by making more profitable to some firms to enter the formal sector,...

This paper formalizes the use of flexible labor contracts in an efficiency wage framework and derives market dualism as an endogenous outcome. By allowing temporary contracts to be either renewed or converted into permanent contracts, new theoretical insights emerge both on the equilibrium wage...

Using a substitution property of worker’s types (productivity and time preference), we propose an explanation for both fixed-wages and wage differentials. Fixed-wages result in bunching at the optimum. Equally productive workers with different time preference accept different wages.