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Dual Labor Markets And Strategic Efficiency Wage

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  • Mohamed Jellal
  • Francois-Charles Wolff

Abstract

We consider a dual labor markets model in which the primary sector requires the presence of eMiciency wage, while the secondary sector is competitive. We show that the Solow condition does not hold in a Stackelberg equilibrium where the primary sector acts as a leader and the secondary one as a follower.[J41]

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal International Economic Journal.

Volume (Year): 17 (2003)
Issue (Month): 3 ()
Pages: 99-112

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Handle: RePEc:taf:intecj:v:17:y:2003:i:3:p:99-112

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References

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  1. Lawrence F. Katz, 1986. "Efficiency Wage Theories: A Partial Evaluation," NBER Working Papers 1906, National Bureau of Economic Research, Inc.
  2. Ramaswamy, Ramana & Rowthorn, Robert E, 1991. "Efficiency Wages and Wage Dispersion," Economica, London School of Economics and Political Science, vol. 58(232), pages 501-14, November.
  3. William M. Boal & Michael R. Ransom, 1997. "Monopsony in the Labor Market," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 86-112, March.
  4. Albrecht, James W & Vroman, Susan B, 1992. "Dual Labor Markets, Efficiency Wages, and Search," Journal of Labor Economics, University of Chicago Press, vol. 10(4), pages 438-61, October.
  5. Jellal, Mohamed & Zenou, Yves, 2000. "A dynamic efficiency wage model with learning by doing," Economics Letters, Elsevier, vol. 66(1), pages 99-105, January.
  6. Schmidt-Sorensen, Jan Beyer, 1990. "The equilibrium effort-wage elasticity in efficiency-wage models," Economics Letters, Elsevier, vol. 32(4), pages 365-369, April.
  7. Faria, Joao Ricardo, 2000. "Supervision and effort in an intertemporal efficiency wage model: the role of the Solow condition," Economics Letters, Elsevier, vol. 67(1), pages 93-98, April.
  8. Solow, Robert M., 1979. "Another possible source of wage stickiness," Journal of Macroeconomics, Elsevier, vol. 1(1), pages 79-82.
  9. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June.
  10. Wauthy, Xavier & Zenou, Yves, 2001. "How Does Imperfect Competition in the Labor Market Affect Unemployment Policies?," IZA Discussion Papers 340, Institute for the Study of Labor (IZA).
  11. Marti, Christopher, 1997. "Efficiency wages: combining the shirking and turnover cost models," Economics Letters, Elsevier, vol. 57(3), pages 327-330, December.
  12. Clark, Andrew E. & Oswald, Andrew J., 1998. "Comparison-concave utility and following behaviour in social and economic settings," Journal of Public Economics, Elsevier, vol. 70(1), pages 133-155, October.
  13. Jellal, Mohamed & Zenou, Yves, 1999. "Efficiency wages and the quality of job matching," Journal of Economic Behavior & Organization, Elsevier, vol. 39(2), pages 201-217, June.
  14. Acemoglu, Daron, 2001. "Good Jobs versus Bad Jobs," Journal of Labor Economics, University of Chicago Press, vol. 19(1), pages 1-21, January.
  15. Lin, Chung-cheng & Lai, Ching-chong, 1994. "The turnover costs and the Solow condition in an efficiency wage model with intertemporal optimization," Economics Letters, Elsevier, vol. 45(4), pages 501-505, August.
  16. Topel, Robert H, 1986. "Local Labor Markets," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages S111-43, June.
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Cited by:
  1. Jellal, Mohamed & Bouadbdallah, khaled & wolff, François charles, 2004. "Unemployment and work sharing in an efficiency wage model," MPRA Paper 38429, University Library of Munich, Germany.
  2. Guerrazzi, Marco, 2012. "On involuntary unemployment: notes on efficiency-wage competition," MPRA Paper 38140, University Library of Munich, Germany.
  3. repec:ebl:ecbull:v:10:y:2004:i:3:p:1-7 is not listed on IDEAS

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