Workers as Partners: a Theory of Responsible Firms in Labor Markets
Fuente:
arXiv
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| Autori principali: | , |
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| Natura: | Preprint |
| Pubblicazione: |
2024
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| _version_ | 1866914335425560576 |
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| author | Del Prato, Francesco Fleurbaey, Marc |
| author_facet | Del Prato, Francesco Fleurbaey, Marc |
| contents | What happens when employers value worker welfare in frictional labor markets? We show this "responsibility" creates an endogenous wedge in the marginal labor cost -- akin to a hiring subsidy -- altering wage and vacancy incentives rather than only changing the surplus split. The wedge is strongest when outside options are weak and separations rare, implying larger wage premia in slack, low-mobility markets. In a wage-posting model with on-the-job search, responsible firms may occupy the high-wage segment even when less productive. In a DMP model, responsible firms commit to higher worker bargaining power, raising the value of unemployment and thereby wages at regular firms. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2411_05567 |
| institution | arXiv |
| publishDate | 2024 |
| record_format | arxiv |
| spellingShingle | Workers as Partners: a Theory of Responsible Firms in Labor Markets Del Prato, Francesco Fleurbaey, Marc General Economics Economics What happens when employers value worker welfare in frictional labor markets? We show this "responsibility" creates an endogenous wedge in the marginal labor cost -- akin to a hiring subsidy -- altering wage and vacancy incentives rather than only changing the surplus split. The wedge is strongest when outside options are weak and separations rare, implying larger wage premia in slack, low-mobility markets. In a wage-posting model with on-the-job search, responsible firms may occupy the high-wage segment even when less productive. In a DMP model, responsible firms commit to higher worker bargaining power, raising the value of unemployment and thereby wages at regular firms. |
| title | Workers as Partners: a Theory of Responsible Firms in Labor Markets |
| topic | General Economics Economics |
| url | https://arxiv.org/abs/2411.05567 |