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A note about effort, wages and unemployment

Author

Listed:
  • Rosario Sánchez Pérez

    (Universitat de València)

  • María Angeles Díaz Mayans

    (Dpto. Análisis Económico)

  • María Dolores Alepuz Domenech

    (Universitat de València)

Abstract

The purpose of this paper is to observe that in a principal agent-model with performance contracts, may exist involuntary unemployment as a consequence of the incentive wage system used by the firm. We show that, in a context of identical firms, the firm that pays more gets a higher level of profits per worker. Also, the reward received for identical workers are different depending on the wage contract stipulated for alternative firms. El propósito de este trabajo es demostrar que en un modelo de principal-agente, con contratos salariales endógenos, el desempleo involuntario aparece como consecuencia del sistema de incentivación salarial utilizado por la empresa. Se demuestra que, para empresas idénticas, la empresa que paga un salario mayor obtiene un nivel de beneficios por trabajador más elevado. Igualmente se comprueba que trabajadores idénticos consiguen ingresos diferentes dependiendo del tipo de contrato estipulado por la empresa.

Suggested Citation

  • Rosario Sánchez Pérez & María Angeles Díaz Mayans & María Dolores Alepuz Domenech, 1996. "A note about effort, wages and unemployment," Working Papers. Serie EC 1996-04, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    • Handle: RePEc:ivi:wpasec:1996-04
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    File URL: http://www.ivie.es/downloads/docs/wpasec/wpasec-1996-04.pdf
    File Function: Fisrt version / Primera version, 1996
    Download Restriction: no
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    More about this item

    Keywords

    Incentivos; salarios de eficiencia; principal-agente Incentives; efficiency-wages; principal agent;
    All these keywords.

    JEL classification:

    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts

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