Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/82878
Authors: 
Gottfries, Nils
Sjöström, Tomas
Year of Publication: 
1999
Series/Report no.: 
Working Paper, Department of Economics, Uppsala University 1998:10
Abstract: 
Recent analyses of wage bargaining has emphasized the distinction between insiders and outsiders, yet one typically assumes that insiders and recently hired outsiders are paid the same wage. We consider a model where the starting wage for outsiders may be lower than the insider wage, but incentive constraints associated with turnover affect the form of the contract. We examine under what conditions the starting wage is linked to the insider wage so that increased bargaining power of insiders raises the starting wage and reduces hiring of outsiders.
Subjects: 
starting wage
bargain
seniority
unemployment
JEL: 
J23
J31
J33
Document Type: 
Working Paper

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