Electronic Resource
Oxford, UK and Boston, USA
:
Blackwell Publishing Ltd
Bulletin of economic research
55 (2003), S. 0
ISSN:
1467-8586
Source:
Blackwell Publishing Journal Backfiles 1879-2005
Topics:
Economics
Notes:
We develop a simple model to illustrate how the effects of turnover costs on wages can be reinforced by an efficiency wage effect. The insider–outsider theory explains why labour turnover costs allow the insiders to earn higher wages than outsiders. According to the efficiency wage theory, higher wages enhance the insiders’ productivity. Therefore, the costs of replacing an insider by a low–paid, low–productivity outsider are increased, which allows the insiders to raise their wages further. Again, higher wages increase insiders’ productivity, which allows them to earn still higher wages, and so on. Thus, the existence of a link between effort and wages can reinforce the effects of labour turnover costs on wages.
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1111/1467-8586.00170
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