IDEAS home Printed from
   My bibliography  Save this paper

Personnel economics issues: What causes increasing work intensity, and what are the policy responses?


  • Josheski, Dushko


In this paper the issue from personnel economics such as work intensity has been investigated. George Akerlof back in 1976 argued that the real life failed to correspond to the standard general equilibrium model set by Arrow-Debreu. In the real life information is neither complete nor it’s costless. In real life workers tend to work in harsh conditions, and put more efforts in order to receive better wages, also they have incentives to educate themselves more, as better educated employees are more productive. More productive means that they work faster as the rat’s race to the cheese and faster rats will get to the cheese first and get more cheese than slower rats. In reality workers do not want to share their output with slower workers. But it is because of bad norms that firms sets or taxes that government imposes that workers tend to work suboptimal i.e. work more than what is required in equilibrium, or work less than the equilibrium socially optimal required effort. The problem also arises when firms compare worker and pick ‘’average’’ worker, nowadays in OECD (rich) countries club, workers tend to get paid more and get spurious data on increased productivity and the measure average effort to be biased, so wage function will then be biased w=w (ē, t), wage is function of average effort and time needed to produce output.

Suggested Citation

  • Josheski, Dushko, 2014. "Personnel economics issues: What causes increasing work intensity, and what are the policy responses?," MPRA Paper 53408, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:53408

    Download full text from publisher

    File URL:
    File Function: original version
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    1. Andrew E. Clark, 2005. "Your Money or Your Life: Changing Job Quality in OECD Countries," British Journal of Industrial Relations, London School of Economics, vol. 43(3), pages 377-400, September.
    Full references (including those not matched with items on IDEAS)

    More about this item


    Rat race equilibrium; labour market regulation policies; job satisfaction; workers performance;

    JEL classification:

    • M50 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - General
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:53408. 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: (Joachim Winter). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.