Wage Posting or Wage Bargaining? Evidence from the Employers' Side

Brenzel, Hanna; Gartner, Hermann; Schnabel, Claus

doi:10.2139/ssrn.2336401

Cited by 11 publications

(12 citation statements)

References 19 publications

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“…It is also much larger for workers engaged in on-the-job-search. Brenzel et al (2014) examine the responses of over 9,000 …rms to the recurrent German Job Vacancy Survey and …nd similar results. They …nd that only 38% of …rms report wage bargaining; this proportion falls to 27% in industries covered by a collective wage agreement and to 32% when an unemployed worker is hired.…”

Section: A Behavioural Search Modelmentioning

confidence: 73%

Endogenous real wage rigidity in a search frictions model

Martin

Wang

2018

Oxford Economic Papers

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Section: A Behavioural Search Modelmentioning

confidence: 73%

Endogenous real wage rigidity in a search frictions model

Martin

Wang

2018

Oxford Economic Papers

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“…Consequently, with the support from state PFL programs, nascent ventures should find it easier to attract more prospective employees from diverse backgrounds, which may increase the likelihood of finding better talent. Attracting more prospective employees helps firms to grow in employment (Gorter, Hassink, & Russo, 2003), especially for key job functions (DeSantola & Gulati, 2017), and potentially negotiate more effectively about wages and compensation (Brenzel, Gartner, & Schnabel, 2014), thus saving payroll expenses per employee. When prospective employees also possess better human capital, firms not only grow but also experience improved employee productivity.…”

Section: Hypothesis Development: a Multilevel Frameworkmentioning

confidence: 99%

Social safety nets and new venture performance: The role of employee access to paid family leave benefits

Bao

2022

Strategic Management Journal

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Research Summary This study examines how social safety nets providing paid family leave (PFL) benefits to employees influence subsequent business performance for entrepreneurial ventures. A multilevel framework guided by qualitative interviews proposes two competing mechanisms (pre‐hiring recruitment gains via prospective employees and post‐hiring operation losses via incumbent employees) and a firm‐level contingency (venture innovation type). Leveraging the 2009‐implemented New Jersey PFL program in a difference‐in‐differences design, I show that employee access to state‐provided PFL benefits adversely affects the profitability for noninnovative new ventures but increases profitability for innovative ventures. Exploration of treatment timing and intermediate venture outcomes supports a dominating pre‐hiring mechanism for innovative ventures (in which the ventures become more attractive to joiners) but a dominating post‐hiring mechanism for noninnovative ventures (due to employee leave). Managerial Summary What are the business implications of employee access to paid family leave (PFL) benefits for nascent firms? Leveraging evidence from a U.S. state PFL program, the study shows that employee access to state PFL benefits hurts the profitability of noninnovative ventures but increases the profitability of innovative ventures. Results suggest that while noninnovative ventures experience operation losses as incumbent employees increase family leave use or quit their jobs, innovative ventures reap recruitment gains by attracting more and better prospective employees. For founders and managers, the provision of employee benefits is more central to firms' ability to create superior human capital pools than often thought and should be aligned with organizational incentive design and HR systems to prepare for productivity shocks related to employee leave use.

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“…The Nash bargaining solution (Nash, 1950, 1953) has long been a workhorse model for analyzing bilateral labor market transactions in which both parties are understood to enjoy some power to influence the terms of exchange. This is presumptively the case in employment relationships governed by collective bargaining agreements, but recent surveys of U.S. workers (Hall & Krueger, 2010, 2012) and German employers (Brenzel et al, 2014) indicate that wage bargaining frequently occurs in non‐union hires as well, especially for higher‐skill workers and in labor markets with lower unemployment rates. Of particular relevance for the analysis of bargaining between firms and workers is the asymmetric Nash bargaining solution, which allows for differences in bargaining power between agents (Kalai, 1977).…”

Section: Introductionmentioning

confidence: 99%

The Nash bargaining solution in labor market analysis

Skillman

2022

Metroeconomica

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Two alternative strategic foundations have been identified for applications of the Nash bargaining solution in economic modelling. However, neither interpretation is consistent with treating “threat point” or disagreement payoffs as individual outside options, a salient feature of bargaining relationships in most labor market settings. This paper uses a matching and strategic bargaining model to examine the determination of bargaining power weights and threat points in the asymmetric Nash bargaining solution. The key result establishes a strategic foundation for applying this solution to market settings with endogenously determined outside options, and shows that bargaining weights depend on outside market conditions only when the matching prospects of one side of the market or the other are relatively high.

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Wage Posting or Wage Bargaining? Evidence from the Employers' Side

Cited by 11 publications

References 19 publications

Endogenous real wage rigidity in a search frictions model

Endogenous real wage rigidity in a search frictions model

Social safety nets and new venture performance: The role of employee access to paid family leave benefits

The Nash bargaining solution in labor market analysis

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