Labour Turnover, Wage Structure, and Natural Unemployment

A firm may reduce its turnover and the entailed turnover costs by raising wages. A rise in unemployment reduces turnover and turnover costs in a similar way. The interaction of these effects leads – in presence of perfectly flexible wages – to a stable equilibrium in the labor market which clears the market but accidentally. Unemployment increases with increases in labor mobility. Wage differentials arise between perfectly identical workers working in different firms that face different turnover costs

Trend Extraction From Time Series With Missing Observations

Trend extraction from time series is often performed by using the filter proposed by Leser (1961), also known as the Hodrick-Prescott filter. A practical problem arises, however, when some data points are missing. This note proposes a method for coping with this problem

Training Costs and Wage Differentials in the Theory of Job Competition

A labor market is considered that is characterized by job competition over job ladders. Firms paying more for comparable jobs can attract workers with better background characteristics (with general human capital) and will lose fewer trained workers (with general and firm-specific human capital). Optimizing behavior on the side of the firms gives rise to a wage structure that shows similar correlations between training and wages as would emerge in a human capital framework, but for different reasons. Further, the wage structure responds to other influences, like the degree of labor mobility

A Robinsonian Approach to Discrimination

Bei der Festsetzung des Lohnsatzes für eine bestimmte Tätigkeit wird die Unternehmung den Lohnsatz weder unnötig hoch wählen noch so gering , dass es unwahrscheinlich wird, eine geeignete Arbeitskraft zu finden. So werden die Lohnsätze unter Berücksichtigung ihres Einflusses auf die Wahrscheinlichkeit einer erfolgreichen Stellenbesetzung optimal fixiert. Wenn Indikatoren wie Geschlecht oder Rasse typischerweise mit unterschiedlichem Angebotsverhalten verknüpft sind, wird die Lohnsetzung der Unternehmung zu Diskriminierung gemäß diesen Indikatoren führen. Der Ansatz kann als eine moderne Neuformulierung der Diskriminierungstheorie von Joan Robinson verstanden werden. Er führt zu mathematisch identischen Gleichgewichtsbedingungen, allerdings mit abweichender Interpretation und unter Vermeidung einiger Schwierigkeiten des ursprünglichen Ansatzes. Innerhalb des entwickelten Rahmens lässt sich die Möglichkeit langfristig anhaltender Diskriminierung aufweisen und so ein Beitrag zur Erklärung eines Phänomens leisten, das für andere Ansätze (Joan Robinson's eingeschlossen) gewisse Schwierigkeiten biete

The Impact of Some Investment Functions in a Kaldorian Growth Model

This paper outlines a variant of Nicholas Kaldor's growth model. An important feature of this model is that it generates steady state growth and Harrod Neutrality of technical progress endogenously. The effect of various assumption on investment bevavior are studied

Wage Dispersion and Overqualification as Entailed by Reder Competition

The expansion of higher education in the Western countries has been accompanied by a marked widening of wage differentials and increasing overqualification. While the increase in wage differentials has been attributed to skill-biased technological change that made advanced skills scarce, this explanation does not fit well with the observed increase in overqualification which suggests that advanced skills are in excess supply. By "Reder-competition" I refer to the simultaneous adjustment of wage offers and hiring standards in response to changing labor market condition. I present a simple model of Reder competition that reproduces the simultaneous increase in wage differentials and overqualification in response to an increase in education

Normality as a Theoretical Concept

This note comments briefly on Mehdad Vahabi's article on Alfred Marshall's concept of "Normal Value." It points out, in particular, the relationship between normality and equilibrium in the context of Marshall's moving equilibrium method