Competition, Wage Commitments, and Application Fees Wang, Ruqu

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Wang, Ruqu
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Journal of Labor Economics
Competition (Economics) -- Analysis; Labor market -- Analysis; Economics
Academic; Trade
In this article I intend to justify the rare use of application fees in labor markets. I analyze a model in which there is a training or testing period preceding a worker's effective production period. With various commitment abilities of firms, I find that application fees are used if and only if all future wages can be committed before a worker applies; otherwise, no application fees will be charged. The model is then modified to explain the positive fees in journal submissions and college admissions.
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