Supervision and Effort in an Intertemporal Efficiency Wage Model: The Role of the Solow Condition
The Solow condition is examined in an intertemporal model that blends the shirking and the turnover models of efficiency wages with managerial supervision. It is shown that the Solow condition does not hold when shirking and turnover costs are considered. The Solow condition can be a possible outcome when managerial productivity offsets shirking and turnover costs.
|Date of creation:||Aug 1998|
|Date of revision:|
|Publication status:||Published in Economic Letters, 2000, 67, pp.93-98|
|Contact details of provider:|| Postal: School of Economics, University of Kent, Canterbury, Kent, CT2 7NP|
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- Salop, Steven C, 1979. "A Model of the Natural Rate of Unemployment," American Economic Review, American Economic Association, vol. 69(1), pages 117-25, March.
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- Lin, Chung-cheng & Lai, Ching-chong, 1994. "The turnover costs and the Solow condition in an efficiency wage model with intertemporal optimization," Economics Letters, Elsevier, vol. 45(4), pages 501-505, August.
- Solow, Robert M., 1979. "Another possible source of wage stickiness," Journal of Macroeconomics, Elsevier, vol. 1(1), pages 79-82.
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