American Economic Journal Macroeconomics · 2012 · 223 citations · 3 references
Social SciencesEconomicsLabor EconomicsLabor Market AnalysisLabor RelationsJob SearchPosting Of WorkersUnemploymentWage BargainingWage DeterminationWage NegotiationEmployer Wage SettingEmployer-employee BargainingJob Search TheoryOn-the-job SearchTake-it-or-leave-it ContractsTake-it-or-leave-it OffersWage OffersWage Posting
Workers either bargain with prospective employers or accept posted wages, and both wage determination modes have spurred extensive research. The study surveyed a representative sample of U.S. workers to examine how wages were determined at the time of hiring into their current or most recent jobs. The survey collected data on workers’ experiences with bargaining, wage posting, and on‑the‑job search during the hiring process. Approximately one‑third of respondents reported bargaining before accepting a job, a similar proportion had precise wage information indicating wage posting, about 40 % were on‑the‑job searchers, and roughly half reported that employers had learned their prior pay before making the offer.
Some workers bargain with prospective employers before accepting a job. Others face a posted wage as a take-it-or-leave-it opportunity. Both modes of wage determination have generated large bodies of research. We surveyed a representative sample of US workers to inquire about the wage determination process at the time they were hired into their current or most recent jobs. A third of the respondents reported bargaining over pay before accepting their current jobs. Almost a third of workers had precise information about pay when they first met with their employers, a sign of wage posting. About 40 percent of workers were on-the-job searchers—they could have remained at their earlier jobs at the time they accepted their current jobs, indicating a more favorable bargaining position than is held by unemployed job-seekers. About half of all workers reported that their employers had learned their pay in their earlier jobs before making the offer that led to the current job. (JEL C83, J31, J52, J64)
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