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A note on wage differentials, fixed-wages and adverse selection

Carlier, Guillaume; Gaumont, Damien (2002), A note on wage differentials, fixed-wages and adverse selection, Economics Letters, 77, 3, p. 349-356. http://dx.doi.org/10.1016/S0165-1765(02)00147-7

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Type
Article accepté pour publication ou publié
Date
2002
Journal name
Economics Letters
Volume
77
Number
3
Publisher
Elsevier
Pages
349-356
Publication identifier
Metadata
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Author(s)
Carlier, Guillaume
Gaumont, Damien
Abstract (EN)
Using a substitution property of worker’s types (productivity and time preference), we propose an explanation for both fixed-wages and wage differentials. Fixed-wages result in bunching at the optimum. Equally productive workers with different time preference accept different wages.
Subjects / Keywords
Wage differentials; Fixed-wages; Labor contracts; Adverse selection; Heterogeneous time preference
JEL
D82 - Asymmetric and Private Information; Mechanism Design
J31 - Wage Level and Structure; Wage Differentials