No-shirking Conditions in Frictional Labor Markets
AbstractA matching model, combined with a shirking model of efficiency wages, is examined. It depends on sources of unemployment variation whether the no-shirking condition (NSC) tends to be binding as the unemployment rate is lower. When only productivity varies, the NSC tends to be binding as the unemployment rate is higher, as in Rocheteau (2001). However, when only matching efficiency varies, the NSC tends to be binding as the unemployment rate is lower.
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Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 10 (2008)
Issue (Month): 1 ()
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Find related papers by JEL classification:
- J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
- L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
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