Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/85746
Authors: 
Janssen, Maarten C.W.
Year of Publication: 
2000
Series/Report no.: 
Tinbergen Institute Discussion Paper 00-028/1
Abstract: 
In this paper, I study the wage a firm sets to attract high abilityworkers (hipo's) in situationsof unemployment. I show that the higher unemployment, the larger afirm's incentives to sorthigh and low ability workers. Moreover, workers will signal their(high) ability in situationsof (high) unemployment only if a job offers a high enough wage. Themain result, therefore,says that a firm sets higher wages, the higher unemployment. As themodel is applicable tothe upper segment of the labour market, the result is in line withthe empirical fact thatincome inequality increases when more people are unemployed.
Subjects: 
Monopsony Power
Labor Market
Screening
JEL: 
C72
D82
J42
Document Type: 
Working Paper

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