A Multisector Model of Efficiency Wages
AbstractThe pattern of effort and wages is derived in a multisector efficiency wage model. Firms choose effort endogenously. Easily monitored or low-turnover jobs have high effort and may have low wages in equilibrium. Empirical wage differentials from a measure of supervision are smaller than observed industry differentials that have been attributed to efficiency wage models and are closer to those predicted by the model. Workers can search for and avail of on-the-job offers. If sectors grow at different rates or the unemployment rate changes, the pattern of wage differentials is unaffected. Copyright 1999 by University of Chicago Press.
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Bibliographic InfoArticle provided by University of Chicago Press in its journal Journal of Labor Economics.
Volume (Year): 17 (1999)
Issue (Month): 2 (April)
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Other versions of this item:
- Walsh, Frank, 1999. "A multisector model of efficiency wages," Open Access publications from University College Dublin urn:hdl:10197/188, University College Dublin.
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