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Efficiency Wage in the Frictional Labour Market- A Theoretical Analysis

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  • Bandopadhyay, Titas Kumar

Abstract

In this paper we introduce efficiency wage relation in the benchmark model of DMP where worker’s efficiency depends on the wage rate and the labour market tightness. We also examine the parametric effects on the Nash-wage rate, market tightness and on the equilibrium unemployment rate. Our results show that all the results obtained in this paper are identical to those obtained in the original DMP model.

Suggested Citation

  • Bandopadhyay, Titas Kumar, 2014. "Efficiency Wage in the Frictional Labour Market- A Theoretical Analysis," MPRA Paper 60124, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:60124
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    References listed on IDEAS

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    More about this item

    Keywords

    Efficiency wage; job destruction;

    JEL classification:

    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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