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A Theory of Wage Dispersion and Job Market Segmentation

Martin L. Weitzman

Massachusetts Institute of Technology

Quarterly Journal of Economics 1989

Job market segmentation refers to the idea that there tends to be a correlation among high wages, high productivity, high capital intensity, high value added, few quits relative to layoffs, and low labor turnover. This paper develops a model of wage dispersion and job market segmentation based on the very sparse assumption that the only departure from a strictly orthodox neoclassical world consists of wages being sticky in the short run. Implications of the model are explored and discussed.

DOI
10.2307/2937837
Volume
104 (1)
Pages
121
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