Grassi, Emanuele and Di Cintio, Marco (2011): Wage incentive profiles in dual labour markets.
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We propose a modified version of the Shapiro-Stiglitz’s (1984) efficiency wage model by introducing temporary contracts in the standard setup. New theoretical insights emerge on the incentive problem faced by workers and firms. We argue that the existence of temporary contracts broaden the incentive menu available to employers and that the optimal incentive structure can be sustained as an equi- librium outcome only if permanent contracts do not disappear. We also provide an alternative explanation of the wage penalty suffered by temporary workers even if standard models of efficiency wages would predict higher compensations for workers facing a higher job loss risk.
|Item Type:||MPRA Paper|
|Original Title:||Wage incentive profiles in dual labour markets|
|Keywords:||Dual labour market, efficiency wages, wage differentials|
|Subjects:||J - Labor and Demographic Economics > J4 - Particular Labor Markets > J41 - Labor Contracts
J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure; Wage Differentials
J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies > J63 - Turnover; Vacancies; Layoffs
|Depositing User:||Emanuele Grassi|
|Date Deposited:||15. Jul 2011 19:25|
|Last Modified:||20. Feb 2013 19:33|
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