Labour Turnover, Wage Structure, and Natural Unemployment

Schlicht, Ekkehart (1978): Labour Turnover, Wage Structure, and Natural Unemployment. In: Journal of Institutional and Theoretical Economics (Zeitschrift für die gesamte Staatswissenschaft), Vol. 134, No. 2: pp. 337-364

Abstract

A firm may reduce its turnover and the entailed turnover costs by raising wages. A rise in unemployment reduces turnover and turnover costs in a similar way. The interaction of these effects leads – in presence of perfectly flexible wages – to a stable equilibrium in the labor market which clears the market but accidentally. Unemployment increases with increases in labor mobility. Wage differentials arise between perfectly identical workers working in different firms that face different turnover costs.

• Item Type: Journal article
• Keywords: efficiency wages, Solow-condition, turnover
• Faculties: Economics > Chairs > Chair of Institutional Economics (closed); Economics
• Subjects: 300 Social sciences > 300 Social sciences, sociology and anthropology; 300 Social sciences > 330 Economics
• JEL Classification: J41, J31, J6
• Language: English