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Job Matching, Learning and the Distribution of Surplus (Revised version published in Journal of Political Economy, vol.104 (1996), pp.838-868 (new title: Learning, Wage Dynamics, and Firm-Specific Human Capital.)
We study wage determination in a job-matching model, under the assumption that wages may be continuously renegotiated, so as to reflect the employee's endogenous outside option. We characterize the unique equilibirum of the model and we analyse the distribution of producer surplus. The model is used to provide a theoretical analysis of the ongoing debate concerning the observed returns to specific (informational) human capital.