Growth and unemployment in a shirking efficiency wage model
Abstract
The relationship between growth and unemployment in a general equilibrium shirking efficiency wage model is explored. In contrast to past work on this subject, detected shirkers are not dismissed but instead incur a monetary punishment. As a result of this modification, the model can account for a stable rate of unemployment when there is positive population growth and-or technological growth in the economy. Moreover, I show that institutions and policies that limit the ability of firms to punish detected shirkers or restrict their use of discretionary bonuses can increase unemployment and reduce the economy's long run growth rate.Download Info
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Bibliographic Info
Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.
Volume (Year): 36 (2003)
Issue (Month): 3 (August)
Pages: 728-746
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Related research
Keywords:Find related papers by JEL classification:
- E0 - Macroeconomics and Monetary Economics - - General
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Brecher, Richard A. & Chen, Zhiqi & Choudhri, Ehsan U., 2010. "A dynamic model of shirking and unemployment: Private saving, public debt, and optimal taxation," Journal of Economic Dynamics and Control, Elsevier, vol. 34(8), pages 1392-1402, August.
- William Scarth, 2005. "Fiscal Policy Can Raise Both Employment and Productivity," International Productivity Monitor, Centre for the Study of Living Standards, vol. 11, pages 39-46, Fall.
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