Labor Market Dynamics When Unemployment Is A Worker Discipline Device
AbstractEfficiency wage models of the effort elicitation type have important implications for labor market dynamics. These models have a wide array of discontinuous sunspot equilibria driven by extraneous variables, in addition to well-behaved equilibria characterized by continuous, slowly adjusting patterns of employment. Many aspects of actual labor markets can be replicated by these models. For example, the longer-run movements they predict in employment allow macroeconomic evidence for a large labor supply elasticity to be reconciled with panel data evidence for a small labor supply elasticity. Many testable, but as yet untested predictions about labor market dynamics can also be generated.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 2967.
Date of creation: May 1989
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Publication status: published as American Economic Review, 84 (4), September 1994, pp. 1045-1059
Note: EFG LS
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Other versions of this item:
- Kimball, Miles S, 1994. "Labor-Market Dynamics When Unemployment is a Worker Discipline Device," American Economic Review, American Economic Association, vol. 84(4), pages 1045-59, September.
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