Wage dynamics, cohort effects and limited commitment models

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In this paper we analyse a model in which firms cannot pay discriminate based on year of entry to the firm, and argue that the wage dynamics are consistent with the empirical results of Beaudry and DiNardo (1991). Their results have been interpreted as supporting a model in which workers are ex post mobile. Since in our model worker mobility/commitment does not affect the optimal contract, it is argued that existing empirical research does not discriminate between different models of worker commitment.
Original languageEnglish
Pages (from-to)350-359
Number of pages10
JournalJournal of European Economic Association
Issue number2-3
Publication statusPublished - Apr 2005


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