The paper focuses on a labour market dominated by a public sector where the links between pay and effort are weak, as in many developing countries. This feature is incorporated in an extension of the basic Shapiro-Stiglitz model of shirking in order to explain the coexistence of high wages (in...

The compensation of executive board members in Germany has become a highly controversial topic since Vodafone's hostile takeover of Mannesmann in 2000 and it is again in the spotlight since the outbreak of the financial crisis of 2009. Based on unique panel data evidence of the 500 largest firms...

We use a rich new body of data on the experiences of unemployed job-seekers to determine the sources of wage dispersion and to create a search model consistent with the acceptance decisions the job-seekers made. From the data and the model, we identify the distributions of four key variables:...

Reservation wages indicate the wage threshold for which individual workers are inclined to supply their working capacity. In important theoretical approaches it is assumed that this threshold depends on the unemployment rate. If this is true, the variation of reservation wages might be an...

Activity and employment rates for immigrant women in many industrialised countries display a great variability across national groups. The aim of this paper is to assess whether this fact is due to a voluntary decision (i.e. large reservation wages by immigrants) or to an involuntary process...