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Co-worker altruism and unemployment

Jorge Vásquez and Marek Weretka

Games and Economic Behavior, 2021, vol. 130, issue C, 224-239

Abstract: It is well-known that social relationships and altruism among workers foster cooperation in the workplace and, therefore, may have beneficial effects for firms. Yet it is unclear how and to what extent co-worker altruism impacts labor market outcomes. In this paper, we find that, although co-worker altruism may be seamless in good times, it may impact the functioning of labor markets during bad times. Specifically, co-worker altruism may potentially lead to wage rigidity and involuntary unemployment in economic downturns. These results seem to be consistent with recent empirical findings.

Keywords: Non-paternalistic altruism; Wage rigidity; Involuntary unemployment (search for similar items in EconPapers)
JEL-codes: D64 D91 J21 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1016/j.geb.2021.08.006

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