A note about effort, wages and unemployment

Rosario Sánchez Pérez, María Angeles Díaz Mayans and María Dolores Alepuz Domenech
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María Angeles Díaz Mayans: Dpto. Análisis Económico
María Dolores Alepuz Domenech: Universitat de València

Working Papers. Serie EC from Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie)

Abstract: The purpose of this paper is to observe that in a principal agent-model with performance contracts, may exist involuntary unemployment as a consequence of the incentive wage system used by the firm. We show that, in a context of identical firms, the firm that pays more gets a higher level of profits per worker. Also, the reward received for identical workers are different depending on the wage contract stipulated for alternative firms. El propósito de este trabajo es demostrar que en un modelo de principal-agente, con contratos salariales endógenos, el desempleo involuntario aparece como consecuencia del sistema de incentivación salarial utilizado por la empresa. Se demuestra que, para empresas idénticas, la empresa que paga un salario mayor obtiene un nivel de beneficios por trabajador más elevado. Igualmente se comprueba que trabajadores idénticos consiguen ingresos diferentes dependiendo del tipo de contrato estipulado por la empresa.

Keywords: Incentivos; salarios de eficiencia; principal-agente Incentives; efficiency-wages; principal agent (search for similar items in EconPapers)
JEL-codes: J33 J41 (search for similar items in EconPapers)
Pages: 24 pages
Date: 1996-04
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Persistent link: https://EconPapers.repec.org/RePEc:ivi:wpasec:1996-04

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