Slowing down

Gylfi Zoega and Yu-Fu Chen

DEGIT Conference Papers from DEGIT, Dynamics, Economic Growth, and International Trade

Abstract: We extend the efficiency wage model of Shapiro and Stiglitz to account for the observation that workers’ effort has a tendency to fall when they approach the end of their employment contract. In particular, we find that the efficiency wage increases when the end of term approaches for a given rate of unemployment. We draw implications for the behavior of workers who are approaching retirement, temporary employment contracts, and the advance notice of impending job loss.

Keywords: Wage setting; shirking; finite horizons (search for similar items in EconPapers)
JEL-codes: J21 J31 (search for similar items in EconPapers)
Pages: 14 Pages
Date: 2012-09
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Related works:
Working Paper: SLOWING DOWN (2012)
Working Paper: Slowing Down (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:deg:conpap:c017_066

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