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Equilibrium unemployment as a discipline device when finding employment is costly

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  • Sang‐Moon Hahm
  • Katarina Mayer

Abstract

In this paper, we study a model that incorporates costly job search into an efficiency wage model. We show that the relationship between wages and detection rates is ambiguous in this framework. The model can generate a positive relationship, consistent with empirically reasonable values for unemployment rates, job finding rates, and employment duration. Dans ce mémoire, on étudie un modèle qui incorpore une recherche d’emploi coǔteuse dans un modèle de salaire d’efficience. On montre que la relation entre salaires et taux de détection est ambiguë. Le modèle peut générer une relation positive, consistante avec des valeurs empiriquement raisonnables pour les taux de chǒmage, les taux de détection d’emplois, et les durées d’emplois.

Suggested Citation

  • Sang‐Moon Hahm & Katarina Mayer, 2011. "Equilibrium unemployment as a discipline device when finding employment is costly," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 44(2), pages 709-717, May.
    • Handle: RePEc:wly:canjec:v:44:y:2011:i:2:p:709-717
    DOI: 10.1111/j.1540-5982.2011.01651.x
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    References listed on IDEAS

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    Cited by:

    1. John G. Sessions & John D. Skåtun, 2018. "Shirking, Standards And The Probability Of Detection," Bulletin of Economic Research, Wiley Blackwell, vol. 70(2), pages 103-118, April.

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