Earnings, coalitions and the stability of firms

This paper presents an economy in which workers hired by a firm receive without cost a firm-specific training that enables them to potentially become independent producers. This specific training changes a worker's outside option according to the firm in which he works. By modelling explicitly the workers' decision to stay or to leave the firm, the paper determines a stable earning profile of the economy.Two main results are obtained. Firstly, that such a stable earning profile may allow for a vector of wages higher than the basic neoclassical wages and for wages differentials across industries even for initially homogenous workers.Secondly, that an industry equilibrium wage depends upon the relative degree of competition existing therein. Both the results seem to match labour markets empirical evidence.