We extend the efficiency wage model of Shapiro and Stiglitz to account for the observation that workers’ effort has a tendency to fall when they approach the end of their employment contract. In particular, we find that the efficiency wage increases when the end of term approaches for a given rate of unemployment. We draw implications for the behavior of workers who are approaching retirement, temporary employment contracts, and the advance notice of impending job loss.
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- Benoit Dostie, 2006.
"Wages, Productivity and Aging,"
Cahiers de recherche
06-15, HEC Montréal, Institut d'économie appliquée.
- Benoit Dostie, 2006. "Wages, Productivity and Aging," Cahiers de recherche 0645, CIRPEE.
- Benoit Dostie, 2007. "Wages, Productivity and Aging," CIRANO Working Papers 2007s-02, CIRANO.
- Dostie, Benoit, 2006. "Wages, Productivity and Aging," IZA Discussion Papers 2496, Institute for the Study of Labor (IZA).
- Addison, John T & Chilton, John B, 1997. "Nondisclosure as a Contract Remedy: Explaining the Advance-Notice Puzzle," Journal of Labor Economics, University of Chicago Press, vol. 15(1), pages 143-64, January.
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