Minimum Wages and Excessive Effort Supply
Abstract
It is well-known that, in static models, minimum wages generate positive worker rents and, consequently, inefficiently low e?ort. We show that this result does not necessarily extend to a dynamic context. The reason is that, in repeated employment relationships, ?rms may exploit workers’ future rents to induce excessively high effort.Download Info
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Paper provided by Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich in its series Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems with number 264.Length:
Date of creation: Jun 2009
Date of revision:
Handle: RePEc:trf:wpaper:264
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Related research
Keywords: bonuses; limited liability; minimum wages;Other versions of this item:
- Kräkel, Matthias & Schöttner, Anja, 2010. "Minimum wages and excessive effort supply," Economics Letters, Elsevier, vol. 108(3), pages 341-344, September.
- Matthias Kräkel & Anja Schöttner, 2009. "Minimum Wages and Excessive Effort Supply," Bonn Econ Discussion Papers bgse8_2009, University of Bonn, Germany.
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
- J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
References
References listed on IDEASPlease 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.:
- Schmitz, Patrick W., 2005.
"Workplace surveillance, privacy protection, and efficiency wages,"
Labour Economics,
Elsevier, vol. 12(6), pages 727-738, December.
- Patrick W. Schmitz, 2005. "Workplace surveillance, privacy protection, and efficiency wages," Bonn Econ Discussion Papers bgse25_2005, University of Bonn, Germany.
- Ohlendorf, Susanne & Schmitz, Patrick W., 2008. "Repeated Moral Hazard, Limited Liability, and Renegotiation," CEPR Discussion Papers 6725, C.E.P.R. Discussion Papers.
Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Schmitz, Patrick W., 2012.
"Job design with conflicting tasks reconsidered,"
MPRA Paper
36914, University Library of Munich, Germany.
- Schmitz, Patrick W., 2013. "Job design with conflicting tasks reconsidered," European Economic Review, Elsevier, vol. 57(C), pages 108-117.
- Schmitz, Patrick W, 2012.
"The hold-up problem, innovations, and limited liability,"
CEPR Discussion Papers
9050, C.E.P.R. Discussion Papers.
- Schmitz, Patrick W., 2012. "The hold-up problem, innovations, and limited liability," Economics Letters, Elsevier, vol. 117(3), pages 841-843.
- Schmitz, Patrick W., 2012. "The hold-up problem, innovations, and limited liability," MPRA Paper 43407, University Library of Munich, Germany.
- Kräkel, Matthias & Schöttner, Anja, 2012. "Internal labor markets and worker rents," Journal of Economic Behavior & Organization, Elsevier, vol. 84(2), pages 491-509.
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