Many technologies used by the LDCs (less developed countries) are developed in the OECD economies, and as such, are designed to make optimal use of the skills of these richer countries' workforces. Due to differences in the supply of skills, some of the tasks performed by skilled workers in the...

In the standard model of human capital with perfect labor markets, workers pay for general training. When labor market feictions compress the structure of wages, firms may invest in the general skills of their employees. The reason is that the d istortion in the wage structure turns...

In market economies, identical workers appear to receive very different wages, violating the "law of one price" of Walrasian markets. We argue in this paper that in the absence of a Walrasian autioneers to coordinate trade": (i) wage dispersion among identical workers is very often an...

During the nineteeth century, most Western societies extended the franchise, a decision which led to unprecedented redistributive programs. We argue that these political reforms can be viewed as strategic decisions by political elites to prevent widespread social unrest and revolution.

This paper offers an alternative theory for the increase in unemployment and wage inequality experienced in the U.S. over the past two decades. In my model firms decide the composition of jobs and then match with skilled and unskilled workers.

We consider an economy where property rights are necessary to ensure sufficient rewards to ex ante investments. Because enforcement of property rights influence the ex post distribution of rents, there is room for corruption. We characterize the optimal organization of the society and optimal...

We propose a model in which economic relations and institutions in advanced and less developed economies differ as these societies have access to different amounts of information. This lack of information makes it hard to give the right incentiv es to managers and entrepreneurs. We argue that...