Wage Posting or Wage Bargaining? A Test Using Dual Jobholders
Upjohn Author ORCID Identifier
NBER Working Paper 28409
We employ a revealed-preference test to distinguish between wage posting and wage bargaining in the labor market. 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.
National Bureau of Economic Research
January 2021, Revised December 2021
LABOR MARKET ISSUES; Employment relationships; Turnover; Wages, health insurance and other benefits
Lachowska, Marta, Alexandre Mas, Raffaele D. Saggio, and Stephen A. Woodbury. 2021. "Wage Posting or Wage Bargaining? A Test Using Dual Jobholders." NBER Working Paper 28409. Cambridge, MA: National Bureau of Economic Research. http://dx.doi.org/10.3386/w28409