Efficiency wages, unemployment and welfare: A trade theorists' guide

Max Albert and Jürgen Meckl

No 348, Discussion Papers, Series II from University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy"

Abstract: The paper incorporates the efficiency-wage theory into an otherwise standard trade model. The model accounts for sector-specific job rents and involuntary unemployment while preserving decisive properties of the competitive fullemployment approach. The key results from the literature can be derived from special cases; e.g., raising minimum wages can reduce unemployment. Additionally, we derive new, counterintuitive results: (a) Emigration can raise home employment, (b) Immigrants might not only find employment but also raise employment for non-immigrants, (c) Investment can reduce employment, (d) Raising unemployment benefits can reduce unemployment.

Date: 1997
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:kondp2:348

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