Wage Dispersion and Wage Dynamics Within and Across Firms This paper examines wage dispersion and wage dynamics in a stock-flow matching economy with on-the-job search. Under stock-flow matching, job seekers immediately become fully informed about the stock of viable vacancies. If only one option is available, monopsony wages result. With more than one firm bidding, Bertrand wages arise. The in...

This paper investigates the developments in wage inequality in Indonesia from 1994 to 2007. Wage changes are decomposed at the mean as well along the wage distribution. In earlier years, the substantial growth in the earnings of workers was accompanied by moderately declining earnings inequality, a development driven by the effect of coefficients (“prices”). However, in recent years, wage inequ...

Motherhood Wage Penalty in Times of Transition Motherhood is usually associated with lower wages due to a number of reasons such as career interruptions, potentially decreased productivity/effort, and discrimination. Earlier literature provides a range of estimates from an up to 20% wage penalty in economies with more flexible labor markets to virtually zero in more family-supportive settings. ...

Noncognitive Abilities and Within-Group Wage Inequality This paper argues that endogenous restructuring processes within firms towards productivityenhancing human resource activities, triggered by advances in information and communication technologies (ICT) and rising supply of educated workers, are typically associated with higher demand for noncognitive abilities. Consistent with the evolutio...

This paper analyses the dynamics of return to knowledge where knowledge is acquired through the combination of interactive and individual learning. We suggest that in light of this new definition of knowledge, choosing the optimal level of education is no longer an individual exercise of present and future utility maximisation as suggested by more formal human capital theory (Becker, 1964). In ...

Why do some vacancies offer a posted wage whereas others offer a negotiable wage? The paper endogenizes the choice of wage policy in a search model with heterogeneous workers. In particular, we characterize the circumstances under which there exist an equilibrium where all firms negotiate wages. Generally, we find that a tight labor market favors bargaining over posting, as does large worker he...

This paper aims to survey the theoretical and empirical literature on increasing wage and employment differentials in favour of high skill workers and against low skill workers. Much literature stresses the role of demand shifts against low skill workers, caused by skill biased technical change (SBTC) and by sector biased international trade (SBIT). Moreover, demand shifts with characteristics ...