Do Deferred Wages Eliminate the Need for Involuntary Unemployment as a Worker Discipline Device?

George Akerlof and Lawrence Katz

Chapter 7 in Advances in the Theory and Measurement of Unemployment, 1990, pp 172-203 from Palgrave Macmillan

Abstract: Abstract In the most popular type of efficiency wage model of unemployment, firms pay wages in excess of market clearing to give workers an incentive not to shirk.1 Such payments in excess of market clearing and the resultant equilibrium unemployment act as a worker discipline device. This chapter concerns what is usually considered the most important theoretical criticism of such models: the so-called bonding argument.

Keywords: Wage Premia; Market Clearing; Trust Fund; Efficiency Wage; Effective Labour (search for similar items in EconPapers)
Date: 1990
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DOI: 10.1007/978-1-349-10688-2_7

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