Wage/tenure contracts with heterogeneous firms

• 成果类型: Article
• 署名作者: Burdett, Ken; Coles, Melvyn
• 署名单位: University of Pennsylvania; University of Essex
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2010.02.002
• 发表日期: 2010
• 页码: 1408-1435
• 关键词: search; wage; TENURE; CONTRACTS; turnover; unemployment

摘要

This paper investigates equilibria where firms post wage/tenure contracts and risk averse workers search for new job opportunities whether employed or unemployed. We generalize previous work by assuming firms have different productivities. Equilibrium implies more productive firms always offer more desirable contracts. Thus workers never quit from more productive firms for less productive firms. Nevertheless turnover is inefficient as employees with long tenures at low productivity firms may reject outside job offers from more productive firms. A worker who quits to a more productive firm may accept a wage cut. Such wage cuts are compensated by faster promotion rates to higher wage levels in the future. We also generalize previous arguments by showing equilibria exist where the distribution of offers contains interior mass points and find equilibrium wage/tenure contracts need not be smooth. (C) 2010 Elsevier Inc. All rights reserved.