Suresh Naidu: Imperfect Labor Markets Are a Hot Topic: "W...

Suresh Naidu: Imperfect Labor Markets Are a Hot Topic: "We are a long way from "concentration affects wages" and onto the much more precise "outside options affect wages" and it is awesome. Sydnee [Caldwell]... looks at variation in outside options given by hiring at firms that employ your ex-coworkers...

...So within the same firm, among workers that started at the same time, the one who had coworkers that happen to be working at hiring fires get higher wages. Oren Danieli... uses a matching model with noise to generate a formula for outside options that winds up being the Herfindahl of predicted job probabilities of workers observably like you across firms. Alex He... looks at the effect of mergers on wages, and finds that mergers target managers that are paying "too high wages" and then fire those managers and lower those wages. Daniel Haanwickel presents a general equilibrium model with task-based demand side (like Acemoglu and @pascualrpo) with monopsony on the LS side and generates minwage spikes, spillovers, and an AKM decomposition of wages in Brazil....

aradisi's paper shows a cool effect of extending the retirement age: lowers wages and employment of younger workers in the same firm (i.e. intrafirm bargaining), and this attenuates the fiscal savings from extending the retirement age. Now the question is whether the right model is 1-1 bargaining like DMP/Postel Vinay (worker own outside option matters), intrafirm bargaining at will Stole-Zweibel (firm OO matters), or monopsonistic wage setting (marginal worker OO matters). But law of 1 wage i think is done...

#shouldread