Heterogeneous Workers, Dualism and Efficiency Wage
We consider a segmented labor market characterized by a Shapiro-Stiglitz efficiency wage setting in both sectors. However, the primary sector and the secondary sector differ in the firing cost which induces a wage diffential. We suppose also a heterogeneous labor force characterized by the presence of > and > workers. Only controlled non-shirking workers of the secondary sector can enter in the primary one. This flow of these ones is assimilated to promoted workers. We show that involuntary unemployment emerges at the equilibrium because of efficiency wage setting in both sectors. We argue also that a reduction of the firing cost in the primary sector leads to a lower unemployment of both worker types and raises wage discrimination.
|Date of creation:||2000|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +33 3 68 85 20 69
Fax: +33 3 68 85 20 70
Web page: http://www.beta-umr7522.fr/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:ulp:sbbeta:2000-01. 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: ()
If references are entirely missing, you can add them using this form.