Uses theoretical models to analyse the macroeconomic implications of the dual labour market. Includes an introduction to the techniques of dynamic programming and the matching function.

The first chapter studies the impact of immigration on wages, internal migration and welfare. I estimate an equilibrium model where labor differs by skill level, gender, experience and nativity. Workers are also heterogeneous in city preferences. Cities vary in productivity levels, housing prices and local amenities. The results indicate that an increase in the stock of immigrants has a small impact on the welfare of natives. If workers are constrained to remain in their original locations, the initial wage impacts on previous immigrants are negative and much more severe in the popular destinations for new immigrants. When workers migrate, the negative wage and welfare impacts in most locations are diffused. The model is also used to assess changes in the skill mix of immigrants and a location-specific immigration policy. The second chapter extends a classic on-the-job search model of homogeneous workers and firms by introducing a shirking problem. Workers choose their effort levels and search on the job. Firms elicit effort through wages and monitoring; an inverse relationship between wages and monitoring rates is derived. This gives rise to an equilibrium wage distribution that contrasts with existing literature in several aspects. In particular I show that a unique hump-shaped and positively skewed wage distribution, as observed empirically, can be derived even when firms and workers are respectively identical. The last chapter examines the relationship between separation rates and the speed of firm learning. In the model, there is uncertainty about match productivity; the firm gathers information about the match by monitoring the worker. The speed of the firm's learning process depends on how frequently the firm monitors the worker. The model predicts that separation rates increase with monitoring intensity. The effect is stronger early in the match and attenuates over time as unpromising matches are identified and terminated. Using the NLSY79, I estimate a probit model for worker separations in the first and second years of tenure. The empirical results are consistent with the model's implications that separation rates increase with monitoring intensity and the effect is stronger early in the relationship.

The contributors explore the reasons why involuntary unemployment happens when supply equals demand.

"It is widely observed that many physicians working in public health facilities do not put in the required effort and time in their jobs. At the same time, many public physicians remain highly motivated, working long hours for little financial reward, in providing quality health services. This mix of provider-types poses fundamental challenges in the design of compensation mechanisms and monitoring regime in public facilities, where the objective of any reward-control paradigm is to improve the inoptimal performance of some physicians without compromising the effort of those already motivated. This paper presents a model to explain shirking behavior among public physicians and explores combinations of monitoring and incentive mechanisms that meet the twin objectives of inspiring the shirkers without losing the motivated. Drawing on the basic Shapiro-Stiglitz shirking model and the theory of social custom, the paper develops and presents a design of incentive structures that consists of punitive monitoring systems accompanied by non-pecuniary rewards. The analysis shows that intensive monitoring persuades the shirking physicians to improve their performance but may have a negative effect on the morale of those already motivated. The findings indicate that non-pecuniary rewards and recognition for the latter can potentially restore the incentives and counter the deleterious effect of increased supervision. The policy implications are discussed by presenting case studies in the health care context of developing countries. "--World Bank web site.

This book explores the relationship between job duration, seniority, and earnings. Drawing on research in labor economics, the authors provide a comprehensive guide to understanding the factors that influence earnings over time. Economists and researchers will find this book to be an essential resource. This work has been selected by scholars as being culturally important, and is part of the knowledge base of civilization as we know it. This work is in the "public domain in the United States of America, and possibly other nations. Within the United States, you may freely copy and distribute this work, as no entity (individual or corporate) has a copyright on the body of the work. Scholars believe, and we concur, that this work is important enough to be preserved, reproduced, and made generally available to the public. We appreciate your support of the preservation process, and thank you for being an important part of keeping this knowledge alive and relevant.