The labor managed firm (LMF) is viewed as a contract-based coalition of workers. The coalition contract defines the worker's membership in the LMF, gives credence to the short-run risk of layoffs, and identifies the LMF as being more than a mere neoclassical production function plus fixed cost. Our model embodies three key features: the rational worker's concern with income-employment risk, the LMF's maximization of the member's expected utility, and the distinction between the LMF's short-run workforce and its long-run membership size. The main result is twofold. First, the LMF's short-run output supply curve is upward sloping in its price, except in the range of very low output prices where revenues are so small relative to the fixed costs as to make the LMF's remuneration fall below the member's short-run reservation income. Second, of equal importance as determinants of the LMF's short-run behavior are the internal and external conditions of financing its short-run fixed cost. In this regard the article delineates the role of internal wage funds and the external insurance provisions in inducing an upward sloping pattern of LMF's output-employment responses in the short run .
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
file. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
For technical questions regarding this item, or to correct its listing, contact: ().
Related research
Keywords:
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)