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Supervision and Effort in an Intertemporal Efficiency Wage Model: The Role of the Solow Condition

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Author Info
Joao Ricardo Faria ()

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Abstract

The Solow condition is examined in an intertemporal model that blends the shirking and the turnover models of efficiency wages with managerial supervision. It is shown that the Solow condition does not hold when shirking and turnover costs are considered. The Solow condition can be a possible outcome when managerial productivity offsets shirking and turnover costs.

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File URL: ftp://ftp.ukc.ac.uk/pub/ejr/RePEc/ukc/ukcedp/9814.pdf
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Publisher Info
Paper provided by Department of Economics, University of Kent in its series Studies in Economics with number 9814.

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Date of creation: Aug 1998
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Publication status: Published in Economic Letters, 2000, 67, pp.93-98
Handle: RePEc:ukc:ukcedp:9814

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Postal: Department of Economics, University of Kent at Canterbury, Canterbury, Kent, CT2 7NP
Phone: +44 (0)1227 764000
Fax: +44 (0)1227 827850
Web page: http://www.ukc.ac.uk/economics/

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Related research
Keywords: Labour-Management Relations; Efficiency Wages; Unemployment; Turnover;

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Find related papers by JEL classification:
J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
J63 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Turnover; Vacancies; Layoffs
J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search

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.:

  1. Krueger, Alan B & Summers, Lawrence H, 1988. "Efficiency Wages and the Inter-industry Wage Structure," Econometrica, Econometric Society, vol. 56(2), pages 259-93, March. [Downloadable!] (restricted)
  2. Marti, Christopher, 1997. "Efficiency wages: combining the shirking and turnover cost models," Economics Letters, Elsevier, vol. 57(3), pages 327-330, December. [Downloadable!] (restricted)
  3. Lin, Chung-cheng & Lai, Ching-chong, 1994. "The turnover costs and the Solow condition in an efficiency wage model with intertemporal optimization," Economics Letters, Elsevier, vol. 45(4), pages 501-505, August. [Downloadable!] (restricted)
  4. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June. [Downloadable!] (restricted)
  5. Salop, Steven C, 1979. "A Model of the Natural Rate of Unemployment," American Economic Review, American Economic Association, vol. 69(1), pages 117-25, March. [Downloadable!] (restricted)
  6. Solow, Robert M., 1979. "Another possible source of wage stickiness," Journal of Macroeconomics, Elsevier, vol. 1(1), pages 79-82. [Downloadable!] (restricted)
  7. Christopher Martin, . "Efficiency Wages: Combining the Shirking and Turnover Cost Models," Economics and Finance Discussion Papers 97-09, Economics and Finance Section, School of Social Sciences, Brunel University. [Downloadable!]
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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.)

  1. MOHAMED JELLAL & FRANÇOIS-CHARLES WOLFF, 2003. "Dual Labor Markets And Strategic Efficiency Wage," International Economic Journal, Korean International Economic Association, vol. 17(3), pages 99-112, October. [Downloadable!] (restricted)
  2. Khaled Bouabdallah & Mohamed Jellal & François-Charles Wolff, 2004. "Unemployment and work sharing in an efficiency wage model," Economics Bulletin, Economics Bulletin, vol. 10(3), pages 1-7. [Downloadable!]
  3. Joao Ricardo Faria, 2000. "An Economic Analysis of the Peter and Dilbert Principles," Working Paper Series 101, School of Finance and Economics, University of Technology, Sydney. [Downloadable!]
  4. Fernando Zanella, 2008. "Different times, different commitments, but the same old practices: failure of the efficiency wage model for socially devoted firms," Economics Bulletin, Economics Bulletin, vol. 10(9), pages 1-6. [Downloadable!]
  5. Frank Walsh, 2000. "Monetary Shocks with Nominal Wage Stickiness and Variable Effort," Working Papers 200024, School Of Economics, University College Dublin. [Downloadable!]
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