Related papers: Coarse Wage-Setting and Behavioral Firms

This paper investigates how institutional wage-setting constraints, such as a national minimum wage or collectively bargained wages, affect firm responses to demand shocks. We develop a framework to interpret heterogeneous shock responses…

In this paper, I introduce a novel decomposition method based on Gaussian mixtures and k-Means clustering, applied to a large Brazilian administrative dataset, to analyze the gender wage gap through the lens of worker-firm interactions…

How much do worker skills, firm pay policies, and their interaction contribute to wage inequality? Standard approaches rely on latent fixed effects identified through worker mobility, but sparse networks inflate variance estimates,…

This paper investigates the causal effect of job training on wage rates in the presence of firm heterogeneity. When training affects the sorting of workers to firms, sample selection is no longer binary but is ``multilayered". This paper…

We use algorithmic and network-based tools to build and analyze the bipartite network connecting jobs with the skills they require. We quantify and represent the relatedness between jobs and skills by using statistically validated networks.…

The aim of this paper is to analyze the relationship between inter-industry, intra-industry and inter-regional clustering and demand for labor by companies in Portugal. Is expected at the outset that there is more demand for work where the…

We develop an analytically tractable model featuring heterogeneous workers and firms, where labor markets clear through a one-to-many sorting mechanism. Firms determine both the number and composition of their employees, shaping (1) the…

In many countries and institutions around the world, the hiring of workers is made through open competitions. In them, candidates take tests and are ranked based on scores in exams and other predetermined criteria. Those who satisfy some…

When a firm hires a worker, adding the new hire to payroll is costly. These costs reduce the amount of resources that can go to recruiting workers and amplify how unemployment responds to changes in productivity. Workers also incur up-front…

We analyze the role of selection bias in generating the changes in the observed distribution of female hourly wages in the United States using CPS data for the years 1975 to 2020. We account for the selection bias from the employment…

Labor market tightness tremendously increased in Germany between 2012 and 2022. We analyze the effect of tightness on wages by combining social security data with unusually rich information on vacancies and job seekers. Instrumental…

This paper provides a comprehensive examination of a Brazilian corporate tax reform targeted at the sector and product level. Difference-in-differences estimates instrumented by sector eligibility show that a 20 percentage point cut on…

This paper provides a new theory of the observed co-movement between overall wage inequality and its between-firm component. We develop and solve analytically a frictionless sorting model with two-sided heterogeneity, in which firms consist…

We analyze how firms should design wage contracts when workers collaborate in teams and effort costs depend on colleagues through a peer network. Performance-based compensation generates incentives that cascade through the organization,…

We fully solve a sorting problem with heterogeneous firms and multiple heterogeneous workers whose skills are imperfect substitutes. We show that optimal sorting, which we call mixed and countermonotonic, is comprised of two regions. In the…

This paper introduces an assignment model with concave costs of skill gaps, which arise generally when firms mitigate costs of mismatch as in Stigler (1939) and Laffont and Tirole (1986, 1991). Concave costs of skill gaps imply that the…

I use matched employer-employee records merged with corporate tax information from 2003 to 2017 to estimate labor market-wide effects of mergers and acquisitions in Brazil. Labor markets are defined by pairs of commuting zone and industry…

The current job survey shows that most software employees are planning to change their job role due to high pay for recent jobs such as data scientists, business analysts and artificial intelligence fields. The survey also indicated that…

We develop a theoretical framework to investigate the link between rising scale economies and stagnating productivity. Our model features heterogeneous firms, imperfect competition, and firm selection. We demonstrate that scale economies…

Using administrative data from Germany, this study provides first evidence on the wage effects of collective bargaining compliance laws. These laws require establishments receiving public contracts to pay wages set by a representative…