01693cas a2200241 a 4500 AALejournalIMF003516 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451860832 1018-5941 BD-DhAAL BD-DhAAL International Monetary Fund. Alternative Models of Wage Dispersion. Washington, D.C. : International Monetary Fund, 2005. 1 online resource (25 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students We analyze labor market models where the law of one price does not hold-that is, models with equilibrium wage dispersion. We begin by assuming workers are ex ante heterogeneous, and highlight a flaw with this approach: if search is costly, the market shuts down. We then assume workers are homogeneous, but matches are ex post heterogeneous. This model is robust to search costs, and it delivers equilibrium wage dispersion. However, we prove the law of two prices holds: generically, we cannot get more than two wages. We explore several other models, including one combining ex ante and ex post heterogeneity, which is robust and can deliver more than two-point wage distributions. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2005/064 Full text available on IMF http://elibrary.imf.org/view/journals/001/2005/064/001.2005.issue-064-en.xml IMF e-Library