Yu-Fu Chen and
No 2012-40, SIRE Discussion Papers from Scottish Institute for Research in Economics (SIRE)
We extend the efficiency wage model of Shapiro and Stiglitz to account for the observation that workersâ€™ 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)
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Working Paper: Slowing down (2012)
Working Paper: SLOWING DOWN (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:edn:sirdps:664
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