Papp, Tamas - In: Review of Economic Dynamics 16 (2013) 3, pp. 540-552
I examine whether a version of the Cahuc et al. (2006) model can match the magnitude of wage dispersion, as measured by the ratio of the average and the lowest wage - the so-called mean-min ratio of Hornstein et al. (2011). I find that the workers' bargaining power is a crucial parameter: the...