This paper accounts for work sharing and unemployment in an efficiency wage model.The Solow condition holds when working hours are exogenous. Under the assumption of endogeneity and using general forms for the effort and cost functions, we prove that work sharing may have a reducing impact on...

We propose a dynamic efficiency wage model with learning by doing. By taking into account the change inthe stock of workers’ knowledge, firms set efficiency wages such that the effort–wage elasticity is not in general equal to one.

We consider a dual labor market with a continuum of heterogeneous workers differentiated by their ability of acquiring a specific training. In the primary sector, jobs require specific training and firms set efficiency wages. In the secondary sector, wages are competitive and no training is...

We consider a dual labor market with a continuum of heterogeneous workers differentiated by their ability of acquiring a specific skill. In the primary sector, jobs require firm-specific training and firms set efficiency wages. In the secondary sector, wages are competitive and no training is...

Uruguay is a small economy. Its integration to MERCOSUR has increased the exposure to regional macroeconomic inestability. The aim of this paper is to assess the impact of regional integration on labour market and poverty. We estimated wage differentials between labour categories, finding a 60%...

We present a field experiment to assess the effect of own and peer wage variations on actual work effort of employees with hourly wages. Work effort neither reacts to an increase of the own wage, nor to a positive or negative peer comparison. This result seems at odds with numerous laboratory...

This paper merges a cost-based model of union bargaining power, in which bargaining power reflects relative costs of agreement and disagreement facing unions and management, with an efficiency-wage model, in which effort per hour responds positively to the real wage. Union bargaining alters the...

By explicitly examining the symmetry assumption implicit in much of the efficiency wage literature, a plausible supply-side link between monetary policy and worker productivity is introduced. Specifically, if relative wages influence worker behavior asymmetrically and monetary policy alters...

The importance of high salaries to circumvent bureaucratic corruption has been widely recognized in the policy debate. Yet, there appears to be much reluctance when it comes to the implementation. In this paper, we argue that deterring corruption through wage incentives may become prohibitively...

No abstract.