The formation of wage expectations in the effort and quit decisions of workers

Carl Campbell ()

MPRA Paper from University Library of Munich, Germany

Abstract: While much work in macroeconomics considers the formation of price expectations, there has been relatively little work analyzing wage expectations. This study develops models in which workers form expectations of average wages in choosing levels of effort and on-the-job search, under the assumption that information on lagged average wages is free but other information is costly. Under reasonable conditions, workers’ expectations are likely to be at least partly adaptive. It is argued that wage expectations may be more important than price expectations in explaining unemployment fluctuations.

Keywords: Imperfect information; Wage expectations (search for similar items in EconPapers)
JEL-codes: D84 J41 (search for similar items in EconPapers)
Date: 2011-06-15
New Economics Papers: this item is included in nep-lab
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Citations: View citations in EconPapers (1)

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https://mpra.ub.uni-muenchen.de/43953/1/MPRA_paper_43953.pdf revised version (application/pdf)

Related works:
Journal Article: The formation of wage expectations in the effort and quit decisions of workers (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:31590

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