Using a simple job market equilibrium model we study the relationship between work effort and monitoring by firms. Some other determinants of work effort investigated include the educational level of the worker, the minimum or start-up salary as well as the economic conjuncture. As common logic...

The state plays a role in reducing the transaction costs of an economic system. While the scholarly focus seems to be on the indirect role of the state through the legal system and the definition and enforcement of property rights, economists seem to overlook the direct role the state has to...