@TechReport{iza:izadps:dp5936,
            	author={Carrillo-Tudela, Carlos and Kaas, Leo},
            	title={Wage Dispersion and Labor Turnover with Adverse Selection},
            	year={2011},
	month={Aug},
            	institution={Institute of Labor Economics (IZA)},
            	address={Bonn},
            	type={IZA Discussion Paper},
            	number={5936},
            	url={https://www.iza.org/publications/dp5936},
	abstract={We consider a model of on-the-job search where firms offer long-term wage contracts to workers of different ability. Firms do not observe worker ability upon hiring but learn it gradually over time. With sufficiently strong information frictions, low-wage firms offer separating contracts and hire all types of workers in equilibrium, whereas high-wage firms offer pooling contracts designed to retain high-ability workers only. Low-ability workers have higher turnover rates, they are more often employed in low-wage firms and face an earnings distribution with a higher frictional component. Furthermore, positive sorting obtains in equilibrium.},
	keywords={adverse selection;on-the-job search;wage dispersion;sorting},
            }