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This paper analyzes the existence of efficiency wages in the French and Spanish labor markets, within an urban efficiency wage theoretical framework. Using data from the French and Spanish time use surveys for the year 2009–2010, results support the main hypothesis of urban efficiency wage models. In particular, that leisure and shirking at work are substitutes, that there is a negative relationship between commuting and leisure, and that there are positive relationships between commuting-shirking at work and commuting-earnings. These results represent the second test of this relationship in the literature, and the first empirical estimate of these relationships for France and Spain. The results show the existence of a direct link between commuting and earnings, which may be helpful in improving the functioning of labor markets.

We study worker behavior in an efficiency‐wage environment in which coworkers’ wages can influence a worker’s effort. Theoretically, we show that an increase in workers’ responsiveness to coworkers’ wages should lead profit‐maximizing firms to compress wages. Our laboratory experiments, by contrast, show that while workers’ effort choices are highly sensitive to their own wages, effort is not affected by coworkers’ wages. This casts doubt on the notion that workers’ concerns with equity might explain pay policies such as wage compression or wage secrecy.

This paper investigates the growth effect of unionization, with a special focus on the ʻEfficiency Wage Hypothesisʼ and on the human capital formation financed publicly by taxation. The employment level becomes independent of the public policy parameters and of the labour market institution parameters when the government chooses the growth rate maximizing tax rate. The growth effect of unionisation is found to be independent of the labour unionʼs orientation in its preference structure. It depends on the net efficiency of the worker. The growth effect of unionisation is different from the corresponding welfare effect.

The interaction among a firm’s choices of output, technology, and monitoring intensity is studied in a general equilibrium model. Firms engage in oligopolistic competition, and unemployment is a result of the existence of efficiency wages. The following results are derived analytically. First, an increase in the cost of exerting effort leads a firm to choose a more advanced technology and a lower level of monitoring intensity. Second, an increase in the discount rate does not change a firm’s choices of technology and monitoring intensity. Third, an increase in the elasticity of substitution among goods leads a firm to choose higher levels of monitoring intensity and technology. In a model in which the level of monitoring is exogenously given, there is a negative relationship between the wage rate and the monitoring intensity. In this model with endogenously chosen monitoring intensity, the wage rate and the monitoring intensity can move either in the same direction or in opposite directions.

Efficiency wage theories of unemployment predict that employers will pay employees above market-clearing wages to deter shirking by workers. However, paying supernormal wages may not be the only solution to this problem. When the Montgolfier Paper Mill encountered shirking and laborers who 'left their employ[ers] when they tried to discipline them\" (Horn, p. 37) in the 1780s, they instead made reforms, the most significant of which was the certificat de conge, a \"record of [each employee's] previous employment and conduct\" (Rosenband 1993, p. 233) maintained by the employer. Under this system, the Montgolfiers could pay normal market wages and still cause their workers to incur penalties for shirking. Legislative barriers in several modern jurisdictions prevent employers from giving detailed feedback on past employees to potential employers.

Impact of economic integration on unemployment is studied in a general equilibrium model in which unemployment is a result of the existence of efficiency wages. Banks provide capital to manufacturing firms and engage in oligopolistic competition. Manufacturing firms choose technologies and also engage in oligopolistic competition. A country with a more efficient financial sector has a lower unemployment rate and a comparative advantage in producing manufactured goods. Trade integration decreases the unemployment rate and increases the wage rate and the equilibrium level of technology. An additional financial integration will decrease the unemployment rate and increase the wage rate and the level of technology further.

We modify the standard nutritional efficiency wage model to allow for the fact that employers can directly provide calories to their workers rather than paying a higher wage to induce employees to spend more on their own caloric consumption. We derive the various theoretical outcomes that are possible depending on the assumptions about the transaction costs of directly providing calories. We argue that in most real-world situations the ability of employers to directly provide calories undermines the traditional efficiency wage theory as a cause of equilibrium unemployment.

What happens if an employer cuts wages by one cent? Much of labor economics is built on the assumption that all the workers will quit immediately. Here, Alan Manning mounts a systematic challenge to the standard model of perfect competition.Monopsony in Motionstands apart by analyzing labor markets from the real-world perspective that employers have significant market (or monopsony) power over their workers. Arguing that this power derives from frictions in the labor market that make it time-consuming and costly for workers to change jobs, Manning re-examines much of labor economics based on this alternative and equally plausible assumption. The book addresses the theoretical implications of monopsony and presents a wealth of empirical evidence. Our understanding of the distribution of wages, unemployment, and human capital can all be improved by recognizing that employers have some monopsony power over their workers. Also considered are policy issues including the minimum wage, equal pay legislation, and caps on working hours. In a monopsonistic labor market, concludes Manning, the \"free\" market can no longer be sustained as an ideal and labor economists need to be more open-minded in their evaluation of labor market policies.Monopsony in Motionwill represent for some a new fundamental text in the advanced study of labor economics, and for others, an invaluable alternative perspective that henceforth must be taken into account in any serious consideration of the subject.

The present model embeds a model of intra-industry trade into a labour market, which is characterised by efficiency wages. It is shown that tariff protection of the import competing, home produced brands, may cause the equilibrium unemployment rate to shoot up and instead of protecting the sector may cause it to contract. This is possible when elasticity of demand is high and firms have less market power and thus, protectionist effect of tariffs may get completely reversed.

The authors use a rich personnel data set from a Russian firm for the years 1997 to 2002 to analyze how the firm adjusts wages and employment during this period in which local labor market conditions changed in the aftermath of the financial crisis in 1998. They relate the development of turnover and wages for various employment categories to alternative models of wage and employment determination. The authors argue that the firm's behavior is consistent with the predictions of efficiency wage models of the shirking and turnover type.