Equilibrium Unemployment and Wage Formation with Matching Frictions and Worker Moral Hazard
This paper synthesizes the shirking and the matching approaches of equilibrium unemployment in order to endogenize the wage formation process as a function of labour market conditions. The steady state equilibrium can take two forms depending on wether the no-shirking condition is binding or not. It is demonstrated that the efficiency wage approach is relevant when the unemployment rate is above a certain threshold. Futhermore, an efficiency wage is more likely when the disutility of effort is high, recruiting costs and workers' bargaining power are low, inspections are unlikely and the workers' productivity is weak.
|Date of creation:||Mar 2000|
|Date of revision:|
|Publication status:||Published in Labor Economics, vol. 8 (1), Feb. 2001, pp. 75-102|
|Contact details of provider:|| Postal: Université de Lausanne, Faculté des HEC, DEEP, Internef, CH-1015 Lausanne|
Phone: ++41 21 692.33.20
Web page: http://www.hec.unil.ch/deep/publications/cahiers/series
More information through EDIRC
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.:
- Alan Manning & Jonathan Thomas, 1997.
"A simple test of the shirking model,"
LSE Research Online Documents on Economics
20300, London School of Economics and Political Science, LSE Library.
- Rocheteau, Guillaume, 2002.
"Working time regulation in a search economy with worker moral hazard,"
Journal of Public Economics,
Elsevier, vol. 84(3), pages 387-425, June.
- Guillaume ROCHETEAU, 2000. "Working Time Regulation in a Search Economy with Worker Moral Hazard," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 00.06, Université de Lausanne, Faculté des HEC, DEEP.
- Lindbeck, A. & Snower, D.J., 1990.
"Interactions between the Efficiency Wage and Insider- Outsider Theories,"
474, Stockholm - International Economic Studies.
- Lindbeck, Assar & Snower, Dennis J., 1991. "Interactions between the efficiency wage and insider-outsider theories," Economics Letters, Elsevier, vol. 37(2), pages 193-196, October.
- Mortensen, Dale T & Pissarides, Christopher A, 1999. "Unemployment Responses to 'Skill-Biased' Technology Shocks: The Role of Labour Market Policy," Economic Journal, Royal Economic Society, vol. 109(455), pages 242-65, April.
- MacLeod, W Bentley & Malcomson, James M, 1998.
"Motivation and Markets,"
American Economic Review,
American Economic Association, vol. 88(3), pages 388-411, June.
- MacLeod, W.B. & Malcomson, J.M., 1997. "Motivation and markets," Discussion Paper Series In Economics And Econometrics 9720, Economics Division, School of Social Sciences, University of Southampton.
- W. Bentley MacLeod & James Malcomson, 1997. "Motivation and Markets," Boston College Working Papers in Economics 339., Boston College Department of Economics.
- Mortensen, Dale T & Pissarides, Christopher, 1999.
"New Developments in Models of Search in the Labour Market,"
CEPR Discussion Papers
2053, C.E.P.R. Discussion Papers.
- Mortensen, Dale T. & Pissarides, Christopher A., 1999. "New developments in models of search in the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 39, pages 2567-2627 Elsevier.
- Joseph A. Ritter & Lowell J. Taylor, 1997.
"Economic models of employee motivation,"
1997-006, Federal Reserve Bank of St. Louis.
- 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.
- Lindbeck, Assar, 1992. "Macroeconomic theory and the labor market," European Economic Review, Elsevier, vol. 36(2-3), pages 209-235, April.
When requesting a correction, please mention this item's handle: RePEc:lau:crdeep:00.07. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gaëlle Sarda)
If references are entirely missing, you can add them using this form.