By increasing the expected wage in low skill jobs, a minimum wage law can reduce the incentive for low skill workers to imitate high skill workers in the signaling process. The gain from reduced investment in the signal can more than offset the loss from unemployment among low skill workers so...

Almost all labor-supply models are estimated under the assumption that workers are free to choose their hours. However, theory, casual empiricism, and survey data suggest that many workers are not free to vary the hours within a job. Consequently, labor-supply estimates based on actual hours of...

Perfect-information, Rubinstein-style bargaining models are used to explore questions about multiple-issue bargaining--is it ever sensible to offer on only a subset of the issues being bargained? What is the effect of limiting offers so that they must cover all issues? We conclude that in...

Efficiency wage models, in which firms find it profitable to pay wages above workers' reservation wages, provide a promising explanation for unemployment and interindustry wage differentials. One criticism of such models is that they imply firms should sell jobs by requiring up-front bonds from...

Despite substantial differences in their views of the appropriate policy response to the existence of poverty, neither the proponents of dual market theory nor its critics have proposed potentially conclusive tests of the dual market hypothesis.This paper presents a test of the two central...

Sri Lanka has a significant chronic unemployment problem. Depending on time period and the definition of unemployment it varies from the low teens to over twenty percent. Nearly all of this unemployment is concentrated among young people who are looking for their first job. Unemployment duration...

This paper examines nonsequential search when jobs vary with respect to nonpecuniary characteristics. In the presence of frictions in the labor market, the equilibrium job distribution need not show evidence of compensating wage differentials. The model also generates several pervasive features...

This paper replicates and extends our earlier analysis of dual market theory. We use a technique which estimates for each worker a probability of being in the primary sector on the basis of his characteristics. We use this information to determine the occupational and industrial composition of...

Using Italian Social Security records for male workers from a sample of firms in Turin from 1981 to 1983, the authors show that, conditional on the worker's own wage, the average wage in the establishment for similar workers is negatively related to quits. They also find that this variable...