Dear colleagues,

The Department of Economics cordially invites you to the WU Economic Research Seminar (Department Seminar) on Wednesday, May 26^th, with

Marco Fongoni

(University of Strathclyde)

on

“Asymmetric Reciprocity and the Cyclical Behaviour of Wages, Effort and Job Creation”

Abstract: This paper analyses the cyclical behaviour of wages, effort and job creation in a search and matching framework in which workers are characterised by asymmetric reference-dependent reciprocity, and firms set wages by considering the effect that wage changes can have on workers' effort, and therefore on output.  The analysis establishes that the cyclical response of workers' effort to wage changes can considerably amplify the magnitude of shocks, independently of the extent of cyclicality of the hiring wage; and that firms' expectations of downward wage rigidity in existing jobs -along with the prospect of output losses due to incumbents negatively reciprocating wage cuts- increases the volatility of job creation. The model generates outcomes consistent with evidence on hiring and incumbents' wage cyclicality, and provides novel predictions for the difference in the dynamics of effort between new hires and incumbent workers.

Date: Wednesday, May 26^th

Time: 4.30 to 6 pm (CET)

Location: Zoom. You can access starting from 4.30 pm using this link.

With best regards,

Harald Oberhofer

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Univ.-Prof. Dr. Harald Oberhofer

Institute for International Economics

WU Vienna University of Economics and Business

Phone: +43/1/31336-4984

Fax: +43/1/31336-4984

Email: harald.oberhofer@wu.ac.at

Webpage: https://www.wu.ac.at/ie/mitarbeiter/harald-oberhofer/

Austrian Institute of Economic Research (WIFO)

Phone: +43/1/7982601-468

Fax: +43/1/7989386

Email: harald.oberhofer@wifo.ac.at

Webpage: http://www.wifo.ac.at/harald_oberhofer