Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
10437782 | Journal of Economic Behavior & Organization | 2005 | 27 Pages |
Abstract
This paper analyses the influence of norms of fairness on wage formation. Fairness is defined by 'real-wage' and 'relative-wage' norms that relate wage offers to workers' own current wage and to the wages of other groups of workers, and, to avoid shirking, firms pay fair wages. The wage norms change endogenously, and the result is hysteresis with respect to both employment and the distribution of wages. An extension of the model that allows 'induced overeducation' may help explain trends in wage inequality.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Peter Skott,