Advanced Search
MyIDEAS: Login to save this article or follow this journal

Entry Wages Signalling the Credibility of Future Wages: A Reinterpretation of the Turnover-Efficiency-Wage Model

Contents:

Author Info

  • Paul Beaudry

Abstract

For both empirical and theoretical reasons, the mechanism by which existing efficiency-wage models link job rationing with turnover costs is unsatisfactory. This paper extends the standard turnover-efficiency-wage model by formally examining the determination of wages as the outcome of a self-enforcing contract. The problem is analyzed as a game of asymmetric information in which the entry level wage plays a signalling role about the credibility of the future wage payments. Suggestive evidence in favor of the model is provided by an examination of the restrictions imposed on wage profiles. For both empirical and theoretical reasons, the mechanism by which existing efficiency-wage models link job rationing with turnover costs is unsatisfactory. This paper extends the standard turnover-efficiency-wage model by formally examining the determination of wages as the outcome of a self-enforcing contract. The problem is analysed as a game of asymmetric information in which the entry level wage plays a signalling role about the credibility of the future wage payments. Suggestive evidence in favour of the model is provided by an examination of the restrictions imposed on wage profiles.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://links.jstor.org/sici?sici=0008-4085%28199411%2927%3A4%3C884%3AEWSTCO%3E2.0.CO%3B2-U
Download Restriction: only available to JSTOR subscribers

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

Volume (Year): 27 (1994)
Issue (Month): 4 (November)
Pages: 884-902

as in new window
Handle: RePEc:cje:issued:v:27:y:1994:i:4:p:884-902

Contact details of provider:
Postal: Canadian Economics Association Prof. Steven Ambler, Secretary-Treasurer c/o Olivier Lebert, CEA/CJE/CPP Office C.P. 35006, 1221 Fleury Est Montréal, Québec, Canada H2C 3K4
Email:
Web page: http://economics.ca/cje/
More information through EDIRC

Order Information:
Email:
Web: http://economics.ca/en/membership.php

Related research

Keywords:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Francois, P. & Ours, J.C. van, 2000. "Gender Wage Differentials in a Competitive Labor Market: The Household Interaction Effect," Discussion Paper 2000-85, Tilburg University, Center for Economic Research.
  2. Vahey, Shaun P., 2004. "Signalling ability to pay and rent sharing dynamics," Journal of Economic Dynamics and Control, Elsevier, vol. 28(11), pages 2327-2339, October.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:cje:issued:v:27:y:1994:i:4:p:884-902. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Prof. Werner Antweiler).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.