To match or not to match? Optimal wage policy with endogenous worker search intensity
Fabien Postel-Vinay
(1, 2, 3, 4, 5, 6, 7, 8, 9, 10)
,
Jean-Marc Robin
(11, 12)
1
CREST -
Centre de Recherche en Économie et Statistique
2 LEA - Laboratoire d'Economie Appliquée
3 Department of Economics
4 PJSE - Paris-Jourdan Sciences Economiques
5 CEPR - Center for Economic Policy Research
6 University of Bristol [Bristol]
7 ECON - Département d'économie (Sciences Po)
8 IZA - Institute for the Study of Labor
9 DELTA - Département et Laboratoire d'Economie Théorique et Appliquée
10 INRA
11 Economics department
12 UP1 - Université Paris 1 Panthéon-Sorbonne
2 LEA - Laboratoire d'Economie Appliquée
3 Department of Economics
4 PJSE - Paris-Jourdan Sciences Economiques
5 CEPR - Center for Economic Policy Research
6 University of Bristol [Bristol]
7 ECON - Département d'économie (Sciences Po)
8 IZA - Institute for the Study of Labor
9 DELTA - Département et Laboratoire d'Economie Théorique et Appliquée
10 INRA
11 Economics department
12 UP1 - Université Paris 1 Panthéon-Sorbonne
Fabien Postel-Vinay
- Fonction : Auteur
- PersonId : 1321862
Jean-Marc Robin
- Fonction : Auteur
- PersonId : 962566
- IdHAL : jean-marc-robin
- ORCID : 0000-0002-3574-9359
- IdRef : 034123199
Résumé
We consider an equilibrium search model with on-the-job search where firms set wages. When an employee receives an outside job offer, it is optimal for the employer to try to retain the employee by matching the offer. This results in a wage increase for the worker. However, if workers are able to vary their search intensity, then this ‘offer-matching’ policy runs into a moral hazard problem. Knowing that outside offers lead to wage increases, workers tend to search more intensively, which is costly for the firms. Assuming that firms can commit never to match outside offers, we examine the set of firm types for which it is preferable to do so. In particular, we show that a plausible pattern is one where a ‘dual’ labor market emerges, with ‘bad’ jobs at low-productivity, nonmatching firms and ‘good’ jobs at high-productivity, matching firms.
Domaines
Economies et financesFormat du dépôt | Notice |
---|---|
Type de dépôt | Article dans une revue |
Titre |
en
To match or not to match? Optimal wage policy with endogenous worker search intensity
|
Résumé |
en
We consider an equilibrium search model with on-the-job search where firms set wages. When an employee receives an outside job offer, it is optimal for the employer to try to retain the employee by matching the offer. This results in a wage increase for the worker. However, if workers are able to vary their search intensity, then this ‘offer-matching’ policy runs into a moral hazard problem. Knowing that outside offers lead to wage increases, workers tend to search more intensively, which is costly for the firms. Assuming that firms can commit never to match outside offers, we examine the set of firm types for which it is preferable to do so. In particular, we show that a plausible pattern is one where a ‘dual’ labor market emerges, with ‘bad’ jobs at low-productivity, nonmatching firms and ‘good’ jobs at high-productivity, matching firms.
|
Auteur(s) |
Fabien Postel-Vinay
1, 2, 3, 4, 5, 6, 7, 8, 9, 10
, Jean-Marc Robin
11, 12
1
CREST -
Centre de Recherche en Économie et Statistique
( 2579 )
- 5, Avenue Henry Le Chatelier, 91120 Palaiseau
- France
2
LEA -
Laboratoire d'Economie Appliquée
( 37750 )
- France
3
Department of Economics
( 120984 )
- University College London - Gower Street - London - WC1E 6BT
- Royaume-Uni
4
PJSE -
Paris-Jourdan Sciences Economiques
( 1312 )
- 48 boulevard Jourdan 75014 Paris
- France
5
CEPR -
Center for Economic Policy Research
( 143559 )
- Royaume-Uni
6
University of Bristol [Bristol]
( 220393 )
- Senate House, Tyndall Avenue, Bristol BS8 1TH
- Royaume-Uni
7
ECON -
Département d'économie (Sciences Po)
( 226874 )
- 28 rue des Saints-Pères - 75007 Paris
- France
8
IZA -
Institute for the Study of Labor
( 103374 )
- Bonn
- Allemagne
9
DELTA -
Département et Laboratoire d'Economie Théorique et Appliquée
( 25318 )
- 48 boulevard Jourdan - 75014 Paris
- France
10
INRA
( 54079 )
- France
11
Economics department
( 163489 )
- "Department of Economics Massachusetts Institute of Technology 50 Memorial Drive E52-391 Cambridge, MA 02142"
- États-Unis
12
UP1 -
Université Paris 1 Panthéon-Sorbonne
( 7550 )
- 12 place du Panthéon, 75231 Paris Cedex 05
- France
|
Public visé |
Scientifique
|
Langue du document |
Anglais
|
Nom de la revue |
|
Vulgarisation |
Non
|
Comité de lecture |
Oui
|
Audience |
Non spécifiée
|
Date de publication |
2004
|
Volume |
7
|
Numéro |
2
|
Page/Identifiant |
297 - 330
|
Domaine(s) |
|
Mots-clés (JEL) |
|
Référence interne |
|
Mots-clés |
fr
Labor market frictions, Wage dispersion, Search effort, Moral hazard
|
DOI | 10.1016/S1094-2025(03)00058-9 |
Spire (Sciences Po) | 2441/dc0ckec3fcb29ms9850b24lg6 |
UT key WOS | 000220534800003 |
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