Wage Differentials, Employer Size, and Unemployment
1998/05/01 by Kenneth Burdett, Dale T. Mortensen · 1,832 citations
Business, Management and Accounting · Economics, Econometrics and Finance · Mathematics · #Consumer Market Behavior and Pricing #Distribution (mathematics) #Economic theories and models #Economics #Efficiency wage #Labour economics #Mathematics #Merger and Competition Analysis #Microeconomics #Unemployment #Wage #Wage dispersion
paper · doi:10.2307/2527292
published in International Economic Review 39(2), 257 (Wiley)
openalex publication_date 1998/05/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
Abstract
The unique equilibrium solution to a game in which a continuum of individual employers choose permanent wage offers and a continuum of workers search by sequentially sampling from the set of offers is characterized. Wage dispersion is a robust outcome provided that workers search while employed as well as when unemployed. The unique nondegenerate equilibrium distribution of wage offers is constructed for three cases: (1) identical workers and employers, (2) identical employers and an atomless distribution of worker supply prices, and (3) identical workers and an atomless distribution of job productivities. Copyright 1998 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.
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