The holy grail of Keynesian theorists during much of the postwar period has been to fully microfound meaningful wage rigidity (MWR), defined by its capacity to rationally suppress wage recontracting. This paper accomplishes that longstanding goal! MWR is shown to be a necessary condition for the...

We show that a minimum wage introduced in the presence of asymmetric information about worker productivities will lead to lower unemployment levels than predicted by the standard labour market model with heterogeneous labour and symmetric information

In this paper we challenge Parente and Prescott's (1999) theoretical framework, which establishes that unions use their control of quot;work practicesquot; to thwart the efficient use of technology in the firms. We argue instead that unions, despite endowing monopoly rights over a technology,...

This paper contains a survey of the recent literature devoted to the returns to schooling within a dynamic structural framework. I present a historical perspective on the evolution of the literature, from early static models set in a selectivity framework (Willis and Rosen, 1979) to the recent...

We study a labor market where firm have private information about their ex-ante heterogeneous productivities and search is random. In this environment, a binding minimum wage can be efficiency-enhancing -- we show that setting it using a version of the Vickery-Clarke-Groves mechanism delivers...

This paper shows that labor leverage, as proxied by labor share, explains roughly half of the value premium, although it is almost unrelated to future cash flow growth. The other half of the value premium is determined by the component of the book-to-market ratio that is orthogonal to labor...

A striking feature of the past few decades has been the development of wage-determination models that assume that labour markets are imperfectly competitive. This paper discusses two such models (trade unions and oligopsony), although there are many more. It also asks if imperfectly competitive...

The job guarantee (JG) is a public option for jobs. It is a permanent, federally funded, and locally administered program that supplies voluntary employment opportunities on demand for all who are ready and willing to work at a living wage. While it is first and foremost a jobs program, it has...