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Armin Falk - One of the best experts on this subject based on the ideXlab platform.
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Wage rigidity in a competitive incomplete contract market
Labor and Demography, 2003Co-Authors: Ernst Fehr, Armin FalkAbstract:Do employers and workers underbid prevailing Wages if there is unemployment? Do employers take advantage of workers’ underbidding by lowering Wages? We hypothesize that under conditions of incomplete labor contracts Wage Levels may positively affect workers’ propensity to cooperate. This, in turn, may prevent firms from underbidding or accepting the underbidding of workers. To get controlled evidence we conducted several experimental double auction markets. Double auctions are well known for their striking competitive properties. Our data show, however, the following regularities: (i) Workers’ underbidding is very frequent but employers refuse to accept workers’ low Wage offers in markets with incomplete labor contracts. However, in the presence of complete labor contracts employers accept and actively enforce Wages close to the competitive Level. (ii) Workers’ effort is positively related to the Wage Level. Therefore, Wage cutting is costly for the employer if workers have discretion over their effort Level. This holds true even in the presence of explicit performance incentives. In markets with incomplete contracts firms’ high Wage strategy increases the gains from trade and renders both workers and firms better off.
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Wage rigidity in a competitive incomplete contract market
1999Co-Authors: Ernst Fehr, Armin FalkAbstract:Do employers and workers underbid prevailing Wages if there is unemployment? Do employers take advantage of workers' underbidding by lowering Wages? We hypothesize that under conditions of incomplete labor contracts, Wage Levels may positively affect workers' propensity to cooperate. This, in turn, may prevent firms from underbidding or accepting the underbidding of workers. Experimental double auctions conducted for the purpose of examining these hypotheses yield the following results: (i) Workers' underbidding is very frequent, but employers refuse to accept workers' low Wage offers in markets with incomplete labor contracts. However, in the presence of complete labor contracts, employers accept and actively enforce Wages close to the competitive Level. (ii) Workers' effort is positively related to the Wage Level. Therefore, Wage cutting is costly for the employer if workers have discretion over their effort Level. This holds true even in the presence of explicit performance incentives.
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Wage Rigidity in a Competitive Incomplete Contract Market
Journal of Political Economy, 1999Co-Authors: Ernst Fehr, Armin FalkAbstract:Do employers and workers underbid prevailing Wages if there si unemployment? Do employers take advantage of workers' underbidding by lowering Wages? Do employers take advantage of workers underbidding by lowering Wages? We hypothesize that under conditions of incomplete labor contracts, Wage Levels may positively affect workers' propensity to cooperate. This, in turn, may prevent firms from underbidding or accepting the underbidding of workers. Experimental double auctions conducted for the purpose of examinating these hypotheses yield the following results: (i) Workers' underbidding is very frequent, but employers refuse to accept workers' low Wage offers in markets with complete labor contracts, employes accept and actively enforce Wages close to the competitive Level. (ii) Workers' effort is positively related to the Wage Level. Therefore over their effort Level. This holds true even in the presence of explicit performance incentives.
Sarah Voitchovsky - One of the best experts on this subject based on the ideXlab platform.
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job loss by Wage Level lessons from the great recession in ireland
IZA Journal of European Labor Studies, 2016Co-Authors: Brian Nolan, Sarah VoitchovskyAbstract:This paper explores the incidence of job loss by Wage Level during the Great Recession, using data for Ireland. Ireland experienced a particularly pronounced decline in employment by international and historical standards, which makes it a valuable case study. Using EU Survey on Income and Living Conditions (EU-SILC) data, our analysis reveals that the probability that an employee remains in employment, from one year to the next, is positively related to their monthly earnings during both boom and bust. The gradient with Wages, however, is much more marked during the bust and remains significantly so even after controlling for a range of individual characteristics including gender, age, education, labour market history, part-time status, industries or occupations. JEL codes: E24, J23, J24, J62, J63
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job loss by Wage Level lessons from the great recession in ireland
Social Science Research Network, 2015Co-Authors: Brian Nolan, Sarah VoitchovskyAbstract:This paper explores the pattern of job loss in the Great Recession with a particular focus on its incidence by Wage Level, using data for Ireland. Ireland experienced a particularly pronounced decline in employment with the onset of the recession, by international and historical standards, which makes it a valuable case study. Using EU-SILC data, our analysis identifies which employees were most affected. The results show that the probability of staying in employment, from one year to the next, is positively related to monthly Wages both during the boom and in the bust. The gradient with Wages, however, is much more marked in the bust, and remains significantly so even after controlling for a range of individual characteristics including part-time status, demographics, education, labour market history, industries or occupations.
Ernst Fehr - One of the best experts on this subject based on the ideXlab platform.
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Wage rigidity in a competitive incomplete contract market
Labor and Demography, 2003Co-Authors: Ernst Fehr, Armin FalkAbstract:Do employers and workers underbid prevailing Wages if there is unemployment? Do employers take advantage of workers’ underbidding by lowering Wages? We hypothesize that under conditions of incomplete labor contracts Wage Levels may positively affect workers’ propensity to cooperate. This, in turn, may prevent firms from underbidding or accepting the underbidding of workers. To get controlled evidence we conducted several experimental double auction markets. Double auctions are well known for their striking competitive properties. Our data show, however, the following regularities: (i) Workers’ underbidding is very frequent but employers refuse to accept workers’ low Wage offers in markets with incomplete labor contracts. However, in the presence of complete labor contracts employers accept and actively enforce Wages close to the competitive Level. (ii) Workers’ effort is positively related to the Wage Level. Therefore, Wage cutting is costly for the employer if workers have discretion over their effort Level. This holds true even in the presence of explicit performance incentives. In markets with incomplete contracts firms’ high Wage strategy increases the gains from trade and renders both workers and firms better off.
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Wage rigidity in a competitive incomplete contract market
1999Co-Authors: Ernst Fehr, Armin FalkAbstract:Do employers and workers underbid prevailing Wages if there is unemployment? Do employers take advantage of workers' underbidding by lowering Wages? We hypothesize that under conditions of incomplete labor contracts, Wage Levels may positively affect workers' propensity to cooperate. This, in turn, may prevent firms from underbidding or accepting the underbidding of workers. Experimental double auctions conducted for the purpose of examining these hypotheses yield the following results: (i) Workers' underbidding is very frequent, but employers refuse to accept workers' low Wage offers in markets with incomplete labor contracts. However, in the presence of complete labor contracts, employers accept and actively enforce Wages close to the competitive Level. (ii) Workers' effort is positively related to the Wage Level. Therefore, Wage cutting is costly for the employer if workers have discretion over their effort Level. This holds true even in the presence of explicit performance incentives.
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Wage Rigidity in a Competitive Incomplete Contract Market
Journal of Political Economy, 1999Co-Authors: Ernst Fehr, Armin FalkAbstract:Do employers and workers underbid prevailing Wages if there si unemployment? Do employers take advantage of workers' underbidding by lowering Wages? Do employers take advantage of workers underbidding by lowering Wages? We hypothesize that under conditions of incomplete labor contracts, Wage Levels may positively affect workers' propensity to cooperate. This, in turn, may prevent firms from underbidding or accepting the underbidding of workers. Experimental double auctions conducted for the purpose of examinating these hypotheses yield the following results: (i) Workers' underbidding is very frequent, but employers refuse to accept workers' low Wage offers in markets with complete labor contracts, employes accept and actively enforce Wages close to the competitive Level. (ii) Workers' effort is positively related to the Wage Level. Therefore over their effort Level. This holds true even in the presence of explicit performance incentives.
Christopher A Sims - One of the best experts on this subject based on the ideXlab platform.
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toward a modern macroeconomic model usable for policy analysis
Nber Macroeconomics Annual, 1994Co-Authors: Eric M Leeper, Christopher A SimsAbstract:This paper presents a macroeconomic model that is both a completely specified dynamic general equilibrium model and a probabilistic model for time series data. We view the model as a potential competitor to existing ISLM-based models that continue to be used for actual policy analysis. Our approach is also an alternative to recent efforts to calibrate real business cycle models. In contrast to these existing models, the one we present embodies all the following important characteristics: i) It generates a complete multivariate stochastic process model for the data it aims to explain, and the full specification is used in the maximum likelihood estimation of the model; ii) It integrates modeling of nominal variables -- money stock, price Level, Wage Level, and nominal interest rate -- with modeling real variables; iii) It contains a Keynesian investment function, breaking the tight relationship of the return on investment with the capital-output ratio; iv) It treats both monetary and fiscal policy explicitly; v) It is based on dynamic optimizing behavior of the private agents in the model. Flexible-price and sticky-price versions of the model are estimated and their fits are evaluated relative to a naive model of no-change in the variables and to an unrestricted VAR. The paper displays the model's implications for the dynamic responses to structural shocks, including policy shocks, and evaluates the relative importance of various shocks for determining economic fluctuations.
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toward a modern macroeconomic model usable for policy analysis
Nber Macroeconomics Annual, 1994Co-Authors: Eric M Leeper, Christopher A SimsAbstract:A macroeconomic model is presented that is both a completely specified dynamic general equilibrium model and a probabilistic model for time series data. We view the model as a potential competitor to the existing IS/LM-based model that continues to be used for actual policy analysis. Our approach is also an alternative to recent efforts to calibrate real business cycle models. In contrast to these existing models, the one we present embodies all the following important characteristics: (1) It generates a complete multivariate stochastic process model for the data it aims to explain, and the full specification is used in the maximum likelihood estimation of the model; (2) it integrates modeling of nominal variables-money stock, price Level, Wage Level, and nominal interest rate-with modeling real variables; (3) it contains a Keynesian investment function, breaking the tight relationship of the return on investment with the capital-output ratio; (4) it treats both monetary and fiscal policy explicitly; and ...
Brian Nolan - One of the best experts on this subject based on the ideXlab platform.
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job loss by Wage Level lessons from the great recession in ireland
IZA Journal of European Labor Studies, 2016Co-Authors: Brian Nolan, Sarah VoitchovskyAbstract:This paper explores the incidence of job loss by Wage Level during the Great Recession, using data for Ireland. Ireland experienced a particularly pronounced decline in employment by international and historical standards, which makes it a valuable case study. Using EU Survey on Income and Living Conditions (EU-SILC) data, our analysis reveals that the probability that an employee remains in employment, from one year to the next, is positively related to their monthly earnings during both boom and bust. The gradient with Wages, however, is much more marked during the bust and remains significantly so even after controlling for a range of individual characteristics including gender, age, education, labour market history, part-time status, industries or occupations. JEL codes: E24, J23, J24, J62, J63
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job loss by Wage Level lessons from the great recession in ireland
Social Science Research Network, 2015Co-Authors: Brian Nolan, Sarah VoitchovskyAbstract:This paper explores the pattern of job loss in the Great Recession with a particular focus on its incidence by Wage Level, using data for Ireland. Ireland experienced a particularly pronounced decline in employment with the onset of the recession, by international and historical standards, which makes it a valuable case study. Using EU-SILC data, our analysis identifies which employees were most affected. The results show that the probability of staying in employment, from one year to the next, is positively related to monthly Wages both during the boom and in the bust. The gradient with Wages, however, is much more marked in the bust, and remains significantly so even after controlling for a range of individual characteristics including part-time status, demographics, education, labour market history, industries or occupations.
