Munich Personal RePEc Archive

Dual labor market and strategic efficiency wage

Jellal, Mohamed and wolff, François charles (2003): Dual labor market and strategic efficiency wage. Published in: INTERNATIONAL ECONOMIC JOURNAL No. Volume 17, Number 3, Autumn 2003


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We consider a dual labor markets model in which the primary sector requires the presence of efficiency wage, while the secondary sector is competitive. We show that the Solow condition does not hold in a Stackelberg equilibrium where the primary sector acts as a leader and the secondary one as a follower.

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