Hedonic Wages with Search Frictions: Reconsidering Employer Heterogeneity
نویسنده
چکیده
Recent work has shown that in a labor market with search frictions and wage dispersion, the relationship between wages and amenities may be much di erent than in the classical compensating wage model. This paper generalizes their work, revealing the full range of potential relationships between wages and amenities possible in a labor market with frictions and clarifying the key role of the nature of rms' productive heterogeneity in determining which one is realized. An equal pro ts baseline for rms' heterogeneity is proposed that implies wage di erentials will typically not be fully compensating, with higher amenity jobs tending to give more
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