Backward-bending of labor supply function and free riders
It seems like that backward- bending of labor supply function can be observed in Central Asian Countries such as Uzbekistan and Kazakhstan. Peopleâ€™s basic needs of life are satisfied and they do not increase labor supplies even if wage increases. It is possible to find some cases in which slowdowns increase, when a manager in a firm enforces penalties for workers have slowdowns. This phenomenon occurs because a worker prefers the position of equilibrium on the labor supply function always in the upper direction. This article explains the increase of free-riders by penalties and how to avoid them.
|Date of creation:||Mar 2012|
|Date of revision:|
|Publication status:||Published in IDE Discussion Paper. No. 350. 2012.3|
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