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• W3125941311 abstract "We consider a matching model of employment with wages that are flexible for new hires, but sticky within matches. We depart from standard treatments of sticky wages by allowing effort to respond to the wage being too high or low. Shimer (2004) and others have illustrated that employment in the Mortensen-Pissarides model does not depend on the degree of wage flexibility in existing matches. But this is not true in our model. If wages of matched workers are stuck too high in a recession, then firms will require more effort, lowering the value of additional labor and reducing new hiring.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org." @default.
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• W3125941311 date "2014-01-01" @default.
• W3125941311 modified "2023-09-25" @default.
• W3125941311 title "How Sticky Wages in Existing Jobs Can Affect Hiring" @default.
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• W3125941311 doi "https://doi.org/10.2139/ssrn.2586116" @default.
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