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Shareholder Value and Equilibrium Rate of Unemployment

Author

Listed:
  • Nicolas Piluso

    () (CERTOP - Centre d'Etude et de Recherche Travail Organisation Pouvoir - CNRS - Centre National de la Recherche Scientifique - UPS - Université Toulouse III - Paul Sabatier - Université Fédérale Toulouse Midi-Pyrénées - UT2J - Université Toulouse - Jean Jaurès - INU Champollion - Institut national universitaire Champollion - Albi)

  • Gabriel Colletis

    () (LEREPS - Laboratoire d'Etude et de Recherche sur l'Economie, les Politiques et les Systèmes Sociaux - UT1 - Université Toulouse 1 Capitole - UT2J - Université Toulouse - Jean Jaurès - Institut d'Études Politiques [IEP] - Toulouse - ENSFEA - École Nationale Supérieure de Formation de l'Enseignement Agricole de Toulouse-Auzeville)

Abstract

The aim of this article is to analyse the consequences of the constraint of shareholder value creation on wages and on unemployment rates in equilibrium. We will show that the shareholder value created by a firm directly depends on the payroll. Therefore, both the firm's and the Unions' new maximisation programs are considerably modified. The main result of this analysis is that a switch from profit maximisation to EVA maximisation leads to an increase in unemployment rates. Furthermore, the unemployment rate now depends on new financial variables.

Suggested Citation

  • Nicolas Piluso & Gabriel Colletis, 2012. "Shareholder Value and Equilibrium Rate of Unemployment," Post-Print halshs-00844568, HAL.
  • Handle: RePEc:hal:journl:halshs-00844568
    DOI: 10....
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00844568
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    equilibrium unemployment; shareholder value; equilibrium wages; trade-union negotiations;

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor

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