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Employment Relations and Wages: What Can We Learn from Subjective Assessments?

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This paper studies the link between hourly wages and workers’ subjective assessments of how easy it would be to find another job as good as the present one, and how easy it would be for an employer to replace an employee. First, using high-quality data, I study the correlates of these two assessments. Second, I study whether respondents who report better outside opportunities and respondents who think they are difficult to replace receive higher wages. The results appear to be consistent with predictions of at least three theoretical frameworks: human capital theory, search theory, and a “locus of control” model.

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  • Marta Lachowska, 2013. "Employment Relations and Wages: What Can We Learn from Subjective Assessments?," Upjohn Working Papers 13-196, W.E. Upjohn Institute for Employment Research.
  • Handle: RePEc:upj:weupjo:13-196
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    More about this item

    Keywords

    Wages; Employment Relations; Outside Options; Human Capital; Locus of Control; Labor Market Frictions;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions

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