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Wages and employment with firm-specific seniority

Ioannides, Yannis M and Pissarides, Christopher ORCID: 0000-0002-0695-058X (1983) Wages and employment with firm-specific seniority. Bell Journal of Economics, 14 (2). pp. 573-580. ISSN 0361-915X

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Identification Number: 10.2307/3003658


We examine wages and employment for junior and senior workers when seniority is firm-specific. We show that if workers are risk averse, the firm chooses both the junior and senior wage independently of the wage offers received by its workers from other firms. Junior workers are paid less than the value of their marginal product and senior workers are paid more. If the firm can monitor its workers' outside offers, it will choose to lay off workers with good offers, but which, nevertheless, may not be so good as its own senior wage.

Item Type: Article
Official URL:
Additional Information: © 1983 The RAND Corporation
Divisions: Economics
Centre for Economic Performance
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HD Industries. Land use. Labor
JEL classification: J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure; Wage Differentials by Skill, Training, Occupation, etc.
Date Deposited: 27 Apr 2007
Last Modified: 15 May 2024 23:27

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