Equilibrium wage and dismissal processes

Christopher Flinn

    Research output: Contribution to journalArticle

    Abstract

    I develop and estimate an equilibrium model of the labor market in which inefficient employees are systematically eliminated from the sector of the market characterized by asymmetric information and moral hazard. Systematic selection on the distribution of productivity characteristics produces wage sequences that are increasing in tenure for employees never previously terminated even in the absence of long-term contracting between employees and individual firms. I provide sufficient conditions for there to exist a unique termination-contract type of equilibrium, and I estimate the equilibrium model using microlevel data from the National Longitudinal Survey of Youth panel.

    Original languageEnglish (US)
    Pages (from-to)221-236
    Number of pages16
    JournalJournal of Business and Economic Statistics
    Volume15
    Issue number2
    DOIs
    StatePublished - 1997

    Fingerprint

    dismissal
    Equilibrium Model
    Wages
    wage
    employee
    equilibrium model
    Moral Hazard
    Asymmetric Information
    Termination
    Estimate
    Productivity
    Sector
    Sufficient Conditions
    labor market
    productivity
    firm
    market
    Market
    Employees
    Business

    Keywords

    • Efficiency wages
    • Measurement error
    • Panel data
    • Structural estimation

    ASJC Scopus subject areas

    • Statistics and Probability
    • Social Sciences (miscellaneous)
    • Economics and Econometrics
    • Statistics, Probability and Uncertainty

    Cite this

    Equilibrium wage and dismissal processes. / Flinn, Christopher.

    In: Journal of Business and Economic Statistics, Vol. 15, No. 2, 1997, p. 221-236.

    Research output: Contribution to journalArticle

    Flinn, Christopher. / Equilibrium wage and dismissal processes. In: Journal of Business and Economic Statistics. 1997 ; Vol. 15, No. 2. pp. 221-236.
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