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Wages and employment with firm-specific seniority

By Yannis M Ioannides and Christopher Pissarides

Abstract

We examine wages and employment for junior and senior workers when seniority is firm-specific. We show that if workers are risk averse, the firm chooses both the junior and senior wage independently of the wage offers received by its workers from other firms. Junior workers are paid less than the value of their marginal product and senior workers are paid more. If the firm can monitor its workers' outside offers, it will choose to lay off workers with good offers, but which, nevertheless, may not be so good as its own senior wage

Topics: HC Economic History and Conditions, HD Industries. Land use. Labor
Publisher: The RAND Corporation
Year: 1983
DOI identifier: 10.2307/3003658
OAI identifier: oai:eprints.lse.ac.uk:1655
Provided by: LSE Research Online
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