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How Sticky Wages in Existing Jobs Can Affect Hiring / Mark Bils, Yongsung Chang, Sun-Bin Kim.
- Format:
- Book
- Author/Creator:
- Bils, Mark.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w19821.
- NBER working paper series no. w19821
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2014.
- Summary:
- We consider a matching model of employment with wages that are flexible for new hires, but sticky within matches. We depart from standard treatments of sticky wages by allowing effort to respond to the wage being too high or low. Shimer (2004) and others have illustrated that employment in the Mortensen-Pissarides model does not depend on the degree of wage flexibility in existing matches. But this is not true in our model. If wages of matched workers are stuck too high in a recession, then firms will require more effort, lowering the value of additional labor and reducing new hiring.
- Notes:
- Print version record
- January 2014.
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