Equilibrium Unemployment As A Worker Discipline Device Pdf Editor

This article includes a, but its sources remain unclear because it has insufficient. Please help to this article by more precise citations. (January 2010) () In, the efficiency wage hypothesis argues that wages, at least in some markets, form in a way that is not market-clearing.

Specifically, it points to the incentive for managers to pay their employees more than the wage in order to increase their or, or reduce costs associated with turnover, in industries where the costs of replacing labor are high. 3d Analyzer Offline Installer. This increased labor productivity and/or decreased costs pay for the higher wages.

American Economic Association Equilibrium Unemployment as a Worker Discipline Device Author(s): Carl Shapiro and Joseph E. Stiglitz Source: TheAmericanEconomicReview, Vol. 3 (Jun., 1984), pp. 433-444 Published by: American Economic Association Stable URL.

Because workers are paid more than the equilibrium wage, there may be. Efficiency wages offer, therefore, a explanation of unemployment, in contrast to theories that emphasize government intervention (such as ). However, efficiency wages do not necessarily imply unemployment, but only uncleared markets and job rationing in those markets. There may be full employment in the economy, and yet efficiency wages may prevail in some occupations. In this case there will be excess supply for those occupations, but some applicants are not hired and have to work for a probably lower wage elsewhere.