Evidence on the determinants of the choice between wage posting and wage bargaining
By: Robert E. Hall, Alan B. Krueger
Contributors: Krueger, Alan B.; National Bureau of Economic Research
Series: NBER working paper series -- working paper 16033; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 16033.
Publisher: National Bureau of Economic Research
Published: 2010
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "Some workers bargain with prospective employers before accepting a job.  Others face a posted wage as a take-it-or-leave-it opportunity.  Theories of wage formation point to substantial differences in labor-market equilibrium between bargained and posted wages.  We surveyed a representative sample of U.S.  workers to inquire about the wage determination process at the time they were hired into their current or most recent jobs.  A third of the respondents reported bargaining over pay before accepting their current jobs.  About a third of workers had precise information about pay when they first met with their employers, a sign of wage posting.  About 40 percent of workers could have remained on their earlier jobs at the time they accepted their current jobs, indicating a more favorable bargaining position than is held by unemployed job-seekers.  Our analysis of the distribution of wages shows that wage dispersion is higher among workers who bargained for their wages.  Wages are higher among bargainers than non-bargainers, after adjusting for the differing compositions of the groups.  Our results on wages give substantial support to the job-ladder model--workers who had the option to remain at their earlier jobs when they took their current jobs can earn higher wages than those without that option"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 6/15/2010.

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