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Competition, Wage Commitments, and Application Fees

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  • Wang, Ruqu

Abstract

In this article, the author intends to justify the rare use of application fees in labor markets. He analyzes a model in which there is a training or testing period preceding a worker's effective production period. With various commitment abilities of firms, the author finds that application fees are used if and only if all future wages can be committed before a worker applies; otherwise, no application fees will be charged. The model is then modified to explain the positive fees in journal submissions and college admissions. Copyright 1997 by University of Chicago Press.

Suggested Citation

  • Wang, Ruqu, 1997. "Competition, Wage Commitments, and Application Fees," Journal of Labor Economics, University of Chicago Press, vol. 15(1), pages 124-142, January.
    • Handle: RePEc:ucp:jlabec:v:15:y:1997:i:1:p:124-42
    DOI: 10.1086/209849
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    References listed on IDEAS

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    1. Lang, Kevin & Kahn, Shulamit, 1990. "Efficiency Wage Models of Unemployment: A Second View," Economic Inquiry, Western Economic Association International, vol. 28(2), pages 296-306, April.
    2. Sattinger, Michael, 1990. "Unemployment, the Market for Interviews, and Wage Employment," Journal of Political Economy, University of Chicago Press, vol. 98(2), pages 356-371, April.
    3. Andrew Weiss & Ruqu Wang, 1990. "A Sorting Model of Labor Contracts: Implications for Layoffs and Wage-Tenure Profiles," NBER Working Papers 3448, National Bureau of Economic Research, Inc.
    4. Carmichael, H Lorne, 1990. "Efficiency Wage Models of Unemployment--One View," Economic Inquiry, Western Economic Association International, vol. 28(2), pages 269-295, April.
    5. J. Luis Guasch & Andrew Weiss, 1980. "Wages as Sorting Mechanisms in Competitive Markets with Asymmetric Information: A Theory of Testing," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 47(4), pages 653-664.
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    Cited by:

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    2. Fan Yang & Ronald M. Harstad, 2017. "The Welfare Cost of Signaling," Games, MDPI, vol. 8(1), pages 1-21, February.
    3. Damien Besancenot & Kim Huynh & Radu Vranceanu, 2011. "A Matching Model of the Academic Publication Market," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 167(4), pages 708-725, December.
    4. Besancenot Damien & Faria João R. & Huynh Kim V., 2014. "Congestion of Academic Journals Under Papers’ Imperfect Selection," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 14(3), pages 1145-1167, July.
    5. Damien Besancenot & Joao R. Faria & Kim Van Huynh, 2009. "Congestion in academic journals under an impartial selection process," Working Papers halshs-00382585, HAL.
    6. Alexander K. Koch & Eloïc Peyrache, 2011. "Aligning Ambition and Incentives," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 27(3), pages 655-688.

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