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Welfare Costs of Sticky Wages When Effort Can Respond

Yongsung Chang () and Mark Bils

Macroeconomics from University Library of Munich, Germany

Abstract: We examine the impact of wage stickiness when employment has an effort as well as hours dimension. Despite wages being predetermined, the labor market clears through the effort margin. Consequently, welfare costs of wage stickiness are potentially much, much smaller.

Keywords: Sticky Wage; Endogenous Effort; Welfare Cost (search for similar items in EconPapers)
JEL-codes: E32 E52 J22 J31 (search for similar items in EconPapers)
Date: 2002-05-01
New Economics Papers: this item is included in nep-dge
Note: Type of Document - pdf; prepared on IBM-PC; to print on HP;
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