Wage Posting or Wage Bargaining? A Test Using Dual Jobholders

Marta Lachowska, Alexandre Mas, Raffaele Saggio, Stephen A. Woodbury

Research output: Contribution to journalArticlepeer-review

4 Scopus citations

Abstract

We employ a revealed preference test to distinguish between wage posting and wage bargaining. Using a sample of dual jobholders in Washington State, we estimate the sensitivity of wages and separation rates to wage shocks in a secondary job. In lower parts of the wage distribution, improvements in the outside option lead to higher separations rates but not to higher wages, consistent with wage posting. In the highest wage quartile, improved outside options translate to higher wages but not higher separation rates, consistent with bargaining. In the aggregate, bargaining appears to be a limited determinant of wage setting.

Original languageEnglish (US)
Pages (from-to)S469-S493
JournalJournal of Labor Economics
Volume40
Issue numberS1
DOIs
StatePublished - Apr 2022

All Science Journal Classification (ASJC) codes

  • Industrial relations
  • Economics and Econometrics

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