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Excessive Labour Raiding
Bryan C. McCannon
New Series, Vol. 75, No. 297 (Feb., 2008), pp. 140-147
Published by: Wiley on behalf of The London School of Economics and Political Science and The Suntory and Toyota International Centres for Economics and Related Disciplines
Stable URL: http://www.jstor.org/stable/40071734
Page Count: 8
You can always find the topics here!Topics: Wages, Employee recruitment, Headhunting, Employment, Settlement counteroffers, Unemployment, Labor, Political science, Labor markets, Political campaigns
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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.
Economica © 2008 London School of Economics