Wage Determination And Employment In Traditional Agriculture

James McIntosh ()

No 98-02, Discussion Papers from University of Copenhagen. Department of Economics

Abstract: Wages in traditional agrarian societies are often observed to be above reservation wages even in the slack season when markets are in a state of excess labour supply. Models of non-cooperative wage setting by landlords which explicitly take account of the costs of supervising hired labour and emphasize worker heterogeneity are developed and analysed. Both symmetric and asymmetric information cases are considered. Conditions are given for the existence of competitive equilibria and their relationship to Nash equilibria. Nash equilibria are shown to be more likely to exist. Nash equilibria exhibit wage dispersion and involuntary unemployment or underemployment with identical workers earning different wage rates.

Keywords: wages; involuntary unemployment; underemployment; supervision costs (search for similar items in EconPapers)
JEL-codes: J30 J43 (search for similar items in EconPapers)
Pages: 16 pages
Date: 1998-03
New Economics Papers: this item is included in nep-lab and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:kud:kuiedp:9802

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