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- W4206354703 abstract "We consider a matching model of employment with flexible wages for new hires but sticky wages within matches. Unlike most models of sticky wages, we allow effort to respond if wages are too high or too low. In the Mortensen-Pissarides model, employment is not affected by wage stickiness in existing matches. But it is in our model. If wages of matched workers are stuck too high, firms require more effort, lowering the value of additional labor and reducing hiring. We find that effort’s response can greatly increase wage inertia. (JEL E24, J23, J31, J41, M51)" @default.
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- W4206354703 date "2022-01-01" @default.
- W4206354703 modified "2023-10-17" @default.
- W4206354703 title "How Sticky Wages in Existing Jobs Can Affect Hiring" @default.
- W4206354703 doi "https://doi.org/10.1257/mac.20190338" @default.
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