ABSTRACT
In the labor market, the asymmetrical distribution of information rests on two assumptions. First, as in the other cases, current employers must possess useful information about the abilities of their workers which is not available to the market at large. But, second, the ability about which current employers have information must apply not only to a worker’s performance at his present job but also to his potential performance in any other future job. In the labor market, conditions are in some ways more difficult and in some ways less so. On the one hand, the worker himself acts as a potential conduit of information. On the other hand, in contrast to other market situations, in the labor market the current employer who plays the role of seller has no incentive at all to disseminate honestly his private information. The chapter also presents an overview of the key concepts discussed in this book.
