How to order
IMF Publications

Working Papers in full text
2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 All


Other research-related activities and publications of the IMF can be found at IMF Research

Free Email Notification

Receive emails when we post new items of interest to you.

Subscribe or Modify your profile



Equilibrium Wage Dispersion: An Example

Author/Editor: Gaumont, Damien | Schindler, Martin | Wright, Randall
Authorized for Distribution: January 1, 2006
Electronic Access: Free Full Text (PDF file size is 1,801KB)
Use the free Adobe Acrobat Reader to view this PDF file.
 
Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.

Summary: Search models with posting and match-specific heterogeneity generate wage dispersion. Given K values for the match-specific variable, it is known that there are K reservation wages that could be posted, but generically never more than two actually are posted in equilibrium. What is unknown is when we get two wages, and which wages are actually posted. For an example with K = 3, we show equilibrium is unique; may have one wage or two; and when there are two, the equilibrium can display any combination of posted reservation wages, depending on parameters. We also show how wages, profits, and unemployment depend on productivity.
 
Series: Working Paper No. 06/19
Subject(s): Wages | Labor markets | Economic models
Author's keyword(s): Search equilibrium | wage posting | wage dispersion | labor theory
 
English  
    Published:   January 1, 2006        
    ISBN/ISSN:   1934-7073   Format:   Paper
    Stock No:   WPIEA2006019   Pages:   16
    Price:   US$15.00
       
     
Please address any questions about this title to publications@imf.org.