Selection Wages and Discrimination
17 Pages Posted: 18 Dec 2010
Date Written: 2009
Applicants for any given job are more or less suited to fill it, and the firm will select the best among them. Increasing the wage offer attracts more applicants and makes it possible to raise the hiring standard and improve the productivity of the staff. Wages that optimize on the trade-off between the wage level and the productivity of the workforce are known as selection wages. As men react more strongly to wage differÂ¬entials than females, the trade-off is more pronounced for men and a profitmaximizing firm will offer a higher wage for men than for women in equilibrium.
Keywords: Discrimination, selection wages, efficiency wages, hiring standards, monopsony, employment criteria, wage posting, Reder competition
JEL Classification: J31, J7, B54, D13, D42
Suggested Citation: Suggested Citation