Welfare Costs of Sticky Wages When Effort Can Respond

Yongsung Chang () and Mark Bils
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Mark Bils: University of Rochester

Macroeconomics from EconWPA

Abstract: We examine the impact of wage stickiness when employment has an effort as well as hours dimension. Despite wages being predetermined, the labor market clears through the effort margin. Consequently, welfare costs of wage stickiness are potentially much, much smaller.

Keywords: Sticky Wage; Endogenous Effort; Welfare Cost (search for similar items in EconPapers)
JEL-codes: E32 E52 J22 J31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge
Date: 2002-05-01
Note: Type of Document - pdf; prepared on IBM-PC; to print on HP;
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http://129.3.20.41/eps/mac/papers/0204/0204003.pdf (application/pdf)

Related works:
Journal Article: Welfare costs of sticky wages when effort can respond (2003)
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