Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/94877 
Year of Publication: 
1986
Series/Report no.: 
IUI Working Paper No. 160
Publisher: 
The Research Institute of Industrial Economics (IUI), Stockholm
Abstract: 
The paper contains an analysis of a firm's optimal wage and recruitment policy, when the dynamic labor supply to the firm is specified as a Poisson distributed flow of job-applicants, whose reservation wages are distributed in a fairly general way. Provided that the firm is not allowed to lower its wage level over time, it has recently been shown by the author that the optimal policy is to establish a constant wage level over future employment states. The paper explores the further properties of the optimal wage and its response to changes in the parameters of the decision problem.
Subjects: 
Recruitment
labour supply
optimal wage
wage rigidity
JEL: 
J30
Document Type: 
Working Paper

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