It is often argued that risk-sharing employment relationships provide a better description of labour relations than the standard Walrasian framework. Such relationships have been introduced in macroeconomic models under an assumption of full commitment. In the absence of commitment, however, these relationships must be self-enforcing. This paper examines the impact of limited commitment on labour market fluctuations. It is shown that self-enforcing employment contracts can explain several stylized facts related to the comovements of real wages and hours worked. Moreover, implications for the estimation of intertemporal labour supply elasticities are highlighted. In particular, it is shown that empirical studies of labour supply that neglect the existence of self-enforcing contracts may severely underestimate workers' willingness to substitute leisure intertemporally.
On dit souvent que des relations d'emploi impliquant un partage de risque donnent une meilleure description des relations de travail que le cadre Walrasien traditionnel. De telles relations ont été introduites dans des modèles macroéconomiques sous l'hypothèse de plein engagement. Toutefois, en l'absense d'engagement, ces relations doivent être auto-exécutoires. Ce papier étudie l'impact de l'engagement limité sur les fluctuations du marché de l'emploi. Il est montré que les contrats de travail auto-exécutoires peuvent expliquer plusieurs faits caractéristiques reliés aux comouvements du salaire réel et des heures travaillées. De plus, des implications pour l'estimation de l'élasticité intertemporelle de l'offre de travail sont mises en évidence. En particulier, il est montré que les études empiriques qui négligent l'existence de contrats auto-exécutoires peuvent sous-estimer sévèrement la volonté des travailleurs de substituter les loisirs entre les périodes.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Find related papers by JEL classification: E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
References listed on IDEAS 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.:
MacLeod, W Bentley & Malcomson, James M, 1998.
"Motivation and Markets,"
American Economic Review,
American Economic Association, vol. 88(3), pages 388-411, June.
[Downloadable!] (restricted)
Other versions:
Michele Boldrin & Michael Horvath, 1994.
"Labor Contracts and Business Cycles,"
Discussion Papers
1068, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
[Downloadable!]
Cited by: (explanations, 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.)