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Nutritional Efficiency Wages and Unemployment: Where's the Beef?

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  • Benjamin Powell
  • Ryan Murphy

Abstract

We modify the standard nutritional efficiency wage model to allow for the fact that employers can directly provide calories to their workers rather than paying a higher wage to induce employees to spend more on their own caloric consumption. We derive the various theoretical outcomes that are possible depending on the assumptions about the transaction costs of directly providing calories. We argue that in most real-world situations the ability of employers to directly provide calories undermines the traditional efficiency wage theory as a cause of equilibrium unemployment.

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  • Benjamin Powell & Ryan Murphy, 2015. "Nutritional Efficiency Wages and Unemployment: Where's the Beef?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 97(2), pages 405-413.
    • Handle: RePEc:oup:ajagec:v:97:y:2015:i:2:p:405-413.
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    File URL: http://hdl.handle.net/10.1093/ajae/aau072
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    Cited by:

    1. Marco Guerrazzi, 2020. "Efficiency-Wage Competition: What Happens as the Number of Players Increases?," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 6(1), pages 13-35, March.

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