Minimum Wages and Excessive Effort Supply

It is well-known that, in static models, minimum wages generate positive worker rents and, consequently, inefficiently low e?ort. We show that this result does not necessarily extend to a dynamic context. The reason is that, in repeated employment relationships, ?rms may exploit workers' future rents to induce excessively high effort.

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Year of publication:	2009
Authors:	Kräkel, Matthias ; Schöttner, Anja
Publisher:	München : Sonderforschungsbereich/Transregio 15 - Governance and the Efficiency of Economic Systems (GESY)
Subject:	Mindestlohn \| Leistungsmotivation \| Arbeitsvertrag \| Vertragstheorie \| Theorie \| bonuses \| limited liability \| minimum wages

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Series:	SFB/TR 15 Discussion Paper ; 264
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	10.5282/ubm/epub.13288 [DOI] 602500419 [GVK] hdl:10419/93796 [Handle] RePEc:trf:wpaper:264 [RePEc]
Source:	EconStor

Persistent link: https://www.econbiz.de/10010333773