Work

Involuntary Unemployment and Non-Compensating Wage Differentials in an Experimental Labour Market

Year: 1996

Type: article

Abstract: In this paper we report the results of a series of efficiency wage experiments. Some of the key predictions of the efficiency wage hypothesis are qualitatively confirmed by the data: (i) higher wages caused a reduction in shirking; (ii) firms offered contracts which exhibited positive job rents; (iii) firms offered systematically different wages and job rents which gave rise to non-compensating income differentials; and (iv) endogenous involuntary unemployment occurred.

Source: The Economic Journal

DOI: 10.2307/2234934

Authors: Ernst Fehr, George Kirchsteiger, Arno Riedl

Institutions: University of Zurich, University of Vienna, Institut für Höhere Studien - Institute for Advanced Studies (IHS)

Language: English

Topic: Labor market dynamics and wage inequality

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: green

OpenAlex ID: W2050189526

FWCI: 5.192

Cites:

Cited by: 60

Related to: 10