Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/2822
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dc.contributor.authorDíaz-Vázquez, Pilaren
dc.contributor.authorSnower, Dennis J.en
dc.date.accessioned2009-01-28T14:13:35Z-
dc.date.available2009-01-28T14:13:35Z-
dc.date.issued2002-
dc.identifier.urihttp://hdl.handle.net/10419/2822-
dc.description.abstractDo firms reduce employment when their insiders (established, incumbent employees) claim higher wages? The conventional answer in the theoretical literature is that insider power has no influence on employment, provided that the newly hired employees (entrants) receive their reservation wages. The reason given is that an increase in insider wages gives rise to a countervailing fall in reservation wages, leaving the present value of wage costs unchanged. Our analysis contradicts this conventional answer. We show that, in the context of a stochastic model of the labour market, an increase in insider wages promotes firing in recessions, while leaving hiring in booms unchanged. Thereby insider power reduces average employment.en
dc.language.isoengen
dc.publisher|aCentre for Economic Policy Research (CEPR) |cLondonen
dc.relation.ispartofseries|aCEPR Discussion Paper Series |x3472en
dc.subject.jelE24en
dc.subject.jelJ31en
dc.subject.jelJ32en
dc.subject.jelJ64en
dc.subject.ddc330en
dc.subject.stwLohnstrukturen
dc.subject.stwInsider-Outsider-Modellen
dc.subject.stwArbeitsucheen
dc.subject.stwAnspruchslohnen
dc.subject.stwMarktmachten
dc.subject.stwTheorieen
dc.titleCan insider power affect employment?-
dc.typeWorking Paperen
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen
dc.identifier.printppn354183117en

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