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Dual labor markets and strategic efficiency wage

Author

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  • Mohamed Jellal

    (Groupe École Supérieure de Commerce de Toulouse - ESCT - Groupe École Supérieure de Commerce de Toulouse - ESCT)

  • François-Charles Wolff

    (LEN - Laboratoire d'économie de Nantes - IEMN-IAE Nantes - Institut d'Économie et de Management de Nantes - Institut d'Administration des Entreprises - Nantes - UN - Université de Nantes)

Abstract

We consider a dual labor markets model in which the primary sector requires the presence of efficiency wage, while the secondary sector is competitive. We show that the Solow condition does not hold in a Stackelberg equilibrium where the primary sector acts as a leader and the secondary one as a follower.

Suggested Citation

  • Mohamed Jellal & François-Charles Wolff, 2003. "Dual labor markets and strategic efficiency wage," Post-Print hal-03913200, HAL.
    • Handle: RePEc:hal:journl:hal-03913200
    DOI: 10.1080/10168730300000006
    Note: View the original document on HAL open archive server: https://hal.science/hal-03913200
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    References listed on IDEAS

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    1. Pisauro, Giuseppe, 1991. "The effect of taxes on labour in efficiency wage models," Journal of Public Economics, Elsevier, vol. 46(3), pages 329-345, December.
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    6. Lawrence F. Katz, 1986. "Efficiency Wage Theories: A Partial Evaluation," NBER Chapters, in: NBER Macroeconomics Annual 1986, Volume 1, pages 235-290, National Bureau of Economic Research, Inc.
    7. Faria, Joao Ricardo, 2000. "Supervision and effort in an intertemporal efficiency wage model: the role of the Solow condition," Economics Letters, Elsevier, vol. 67(1), pages 93-98, April.
    8. Solow, Robert M., 1979. "Another possible source of wage stickiness," Journal of Macroeconomics, Elsevier, vol. 1(1), pages 79-82.
    9. Norman,George & Thisse,Jacques-François (ed.), 2000. "Market Structure and Competition Policy," Cambridge Books, Cambridge University Press, number 9780521783330, September.
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    17. Agenor, Pierre-Richard & Santaella, Julio A., 1998. "Efficiency wages, disinflation and labor mobility," Journal of Economic Dynamics and Control, Elsevier, vol. 22(2), pages 267-291, February.
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    Cited by:

    1. François-Charles Wolff & Mohamed Jellal & Khaled Bouabdallah, 2004. "Unemployment and work sharing in an efficiency wage model," Economics Bulletin, AccessEcon, vol. 10(3), pages 1-7.
    2. Marco Guerrazzi, 2020. "Efficiency-Wage Competition: What Happens as the Number of Players Increases?," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 6(1), pages 13-35, March.
    3. repec:ebl:ecbull:v:10:y:2004:i:3:p:1-7 is not listed on IDEAS
    4. Guerrazzi, Marco, 2012. "On involuntary unemployment: notes on efficiency-wage competition," MPRA Paper 38140, University Library of Munich, Germany.

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    More about this item

    Keywords

    Solow condition; efficiency wage; dual labor markets;
    All these keywords.

    JEL classification:

    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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