This paper investigates marriage market equilibrium when bargaining in marriage (BIM) determines allocation within marriage. In contrast, the standard marriage market model assumes that prospective spouses make binding agreements in the marriage market (BAMM) that determine allocation within marriage. When BIM determines allocation within marriage, the appropriate framework for analyzing marriage market equilibrium is the Gale-Shapley matching model, not the Koopmans-Beckmann-Shapley-Shubik assignment model. BIM and BAMM have different implications not only for allocation within marriage but also for who marries, who marries whom, the number of marriages, and the Pareto efficiency of marriage market equilibrium.

Compensating wage theory predicts that workers receiving more generous fringe benefits are paid a lower wage than comparable workers who prefer fewer fringe benefits. This study tests this prediction for employer‐provided health insurance by modeling the wages of married women employed full‐time in the labor market. Husband's union status, husband's firm size, and husband's health coverage through his job are used as instruments for his wife's own employer health insurance benefits. The estimates suggest wives with own employer health insurance accept a wage about 20% lower than what they would have received working in a job without benefits.

A model where choice of occupation is sequential is applied to college graduates from the National Longitudinal Study of the High School Class of 1972 to investigate how higher moments of occupational earnings distributions influence initial field of work. Individual specific life‐cycle earnings projections that incorporate option values of occupational mobility are generated, and the relationship between these pay measures and choice of initial occupation is explored within a multinomial logit framework. The findings indicate a strong positive relationship between these earnings predictions and the likelihood that college graduates enter an occupation.

Divergent trends in the real value of the minimum wage in Mexico and Colombia in the 1980s provide an opportunity for evaluating the impact of minimum wages on developing economies. Using panel data for each country, substantial disemployment effects of minimum wages are found in Colombia, where the impact is estimated at roughly 2%–12% over the 1981–87 period. In Mexico, minimum wages have had no effect on wages or employment in the formal sector. The key explanation for the different impact is that the minimum wage is an effective wage in Colombia but not in Mexico.

This article analyzes a minimum wage in a market with imperfect information and job search. It establishes that employment effects of a minimum wage do not generally indicate welfare effects. It shows that researchers interested in welfare consequences should ask two questions. First, is the existing minimum wage binding? Second, do some firms that would be bound by a new minimum wage presently experience labor shortages? If the answers to these questions are no and yes, respectively, this article supports the conclusion that a higher minimum wage is welfare improving, regardless of its effect on the unemployment rate.

I construct an equilibrium search model where some employers have a distaste for hiring minority workers and show that this bias results in economic discrimination against minority workers. Although only unprejudiced firms hire minority workers, minority workers receive lower wages than workers not facing discrimination whenever any employers in the market have a distaste for minority workers. One implication of the model is that gender or racial wage differentials understate the utility loss from discrimination. In addition, the wages of minority workers increase when their proportion increases in the labor market.

Immigrant workers will be evaluated by their ability to speak English as well as by their other skills. The empirical work in this article add resses the hypothesis that there is an economic cost to English langu age deficiency both in occupation-specific earnings and in (cross-sec tional) occupational mobility. This analysis suggests that it is cost ly to be deficient in English, but the cost is ethnically and occupat ionally specific. Hispanics have a higher cost for English language d eficiency than Asians at every skill level. Copyright 1988 by University of Chicago Press.

In this paper I examine the effect of the current social security system on the structure of compensation that a wealth-maximizing worker selects. I show that the current method of benefit determination encourages an upward-sloping wage profile and that the social security system alters the mix of wage and pension payments. In addition, the intragenerational transfers of the social security system alter the level of investment in human capital. As a result, the social security system reduces the disparity of income within the economy.

This paper focuses on earnings differentials in the for-profit and private nonprofit sectors, with specific reference to lawyers. An earnings equation for private lawyers is estimated and is used to predict what the nonprofit sector "public interest" lawyers could earn in the private sector. The finding is that the public interest lawyers are paid substantially less, that they know this, and that the financial sacrifice is permanent. Next, a job choice equation is estimated which suggests that those lawyers who choose public interest work have different "preferences" from those who choose private law practices. The difference may help to account for the willingness of the public interest lawyers to accept lower monetary rewards. Further research is needed to determine whether the differences found for lawyers in the two sectors are also found in other industries, and whether such differences are found only at the level of management or at lower levels. The goal is improved understanding of behavioral differences between for-profit and nonprofit firms.

Conventional analysis predicts that workers pay part of their on-the-job training costs by accepting a lower starting wage and subsequently realize a return to this investment in the form of greater wage growth. Missing from the conventional treatment of on-the-job training is a discussion of the process by which heterogeneous workers are matched to jobs requiring varying amounts of training. This matching process constitutes a key feature of the on-the-job training model presented in this article and tested with a unique data set containing extensive information concerning on-the-job training, employer search, wages, and wage and productivity growth.