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Theories of Pay and Unemployment: Survey Evidence from Swedish Manufacturing Firms

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Author Info

  • Agell, J.
  • Lundborg, P.

Abstract

An interview survey was designed to explore how personnel managers and senior wage negotiators respond to popular models of the labor market. As in A. S. Blinder and D. H. Choi (1990), the authors' results indicate that relative wages and notions of fairness are important, and that this may explain nominal wage rigidity. The authors find much evidence of efficiency wage mechanisms. The reactions to some questions also point to theories based on rent-sharing. Moreover, while underbidding is not that uncommon, firms seem quite unwilling to hire underbidders. The authors also obtain indications of adverse selection problems. Copyright 1995 by The editors of the Scandinavian Journal of Economics.

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Bibliographic Info

Paper provided by Uppsala - Working Paper Series in its series Papers with number 1993-8.

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Length: 34 pages
Date of creation: 1992
Date of revision:
Handle: RePEc:fth:uppaal:1993-8

Contact details of provider:
Postal: UPPSALA UNIVERSITY, DEPARTMENT OF ECONOMICS, S-751 20 UPPSALA SWEDEN.
Phone: + 46 18 471 25 00
Fax: + 46 18 471 14 78
Email:
Web page: http://www.nek.uu.se/
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Keywords: unemployment ; wages;

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References

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  1. Bentolila, Samuel & Bertola, Giuseppe, 1990. "Firing Costs and Labour Demand: How Bad Is Eurosclerosis?," Review of Economic Studies, Wiley Blackwell, vol. 57(3), pages 381-402, July.
  2. Assar Lindbeck, 1993. "Unemployment and Macroeconomics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121751, December.
  3. Alan S. Blinder & Don H. Choi, 1989. "A Shred of Evidence on Theories of Wage Stickiness," NBER Working Papers 3105, National Bureau of Economic Research, Inc.
  4. Layard, Richard & Nickell, Stephen & Jackman, Richard, 1991. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780198284345, September.
  5. Agell, Jonas & Lundborg, Per, 1992. "Fair wages, involuntary unemployment and tax policies in the simple general equilibrium model," Journal of Public Economics, Elsevier, vol. 47(3), pages 299-320, April.
  6. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard, 1986. "Fairness as a Constraint on Profit Seeking: Entitlements in the Market," American Economic Review, American Economic Association, vol. 76(4), pages 728-41, September.
  7. Akerlof, George A, 1982. "Labor Contracts as Partial Gift Exchange," The Quarterly Journal of Economics, MIT Press, vol. 97(4), pages 543-69, November.
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