The labor market and corporate structure
AbstractThis paper analyses the impact of labour demand and labour market regulations on the corporate structure of fims. It finds that higher wages are associated with lower monitoring, irrespective of whether these high wages are caused by labour market regulations, unions or higher labour demand. These comparative static results are in line with the broad trends in the data. The paper also finds that the organization of firms has important macroeconomic implications. In particular, monitoring is a type of ârent-seekingâ activity and the decentralized equilibrium spends excessive resources on monitoring. Labour market regulations that reduce monitoring by pushing wages up may increase net output or reduce it only by a small amount even though they reduce employment.
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Bibliographic InfoArticle provided by Elsevier in its journal European Economic Review.
Volume (Year): 46 (2002)
Issue (Month): 10 (December)
Contact details of provider:
Web page: http://www.elsevier.com/locate/eer
Other versions of this item:
- Acemoglu, Daron & Newman, Andrew, 1997. "The Labour Market and Corporate Structure," CEPR Discussion Papers 1708, C.E.P.R. Discussion Papers.
- Acemoglu, D. & Newman, A.F., 1997. "The Labor Market and Corporate Structure," Working papers 97-8, Massachusetts Institute of Technology (MIT), Department of Economics.
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
- L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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