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Excessive Labour Raiding

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  • BRYAN C. McCANNON

Abstract

Labour raiding refers to firms recruiting and hiring employed workers. The literature on labour raiding supports the idea that raiding sorts workers into their most productive positions. I present a model where an outside firm decides whether or not to pay to learn the match‐quality of an employed worker and the employer decides whether or not to pay its worker a high wage that pre‐empts the raiding. I show that the employer may pay a low wage and gamble that it will not be raided rather than use a pre‐emptive wage. This leads to an excessive amount of raiding.

Suggested Citation

  • BRYAN C. McCANNON, 2008. "Excessive Labour Raiding," Economica, London School of Economics and Political Science, vol. 75(297), pages 140-147, February.
    • Handle: RePEc:bla:econom:v:75:y:2008:i:297:p:140-147
    DOI: 10.1111/j.1468-0335.2007.00604.x
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    Cited by:

    1. Jin‐Hyuk Kim, 2014. "Employee Poaching: Why It Can Be Predatory," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 35(5), pages 309-317, July.

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