Labour Turnover, Wage Structure, and Natural Unemployment
AbstractA firm may reduce its turnover and the entailed turnover costs by raising wages. A rise in unemployment reduces turnover and turnover costs in a similar way. The interaction of these effects leads – in presence of perfectly flexible wages – to a stable equilibrium in the labor market which clears the market but accidentally. Unemployment increases with increases in labor mobility. Wage differentials arise between perfectly identical workers working in different firms that face different turnover costs.
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Bibliographic InfoPaper provided by University of Munich, Department of Economics in its series Munich Reprints in Economics with number 1255.
Date of creation: 1978
Date of revision:
Publication status: Published in Journal of Institutional and Theoretical Economics (Zeitschrift für die gesamte Staatswissenschaft) 2 134(1978): pp. 337-364
efficiency wages; Solow-condition; turnover;
Find related papers by JEL classification:
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
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- Efficiency wage in Wikipedia (English)
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