Welfare Costs of Sticky Wages When Effort Can Respond

31 Pages Posted: 15 Aug 2001

See all articles by Mark Bils

Mark Bils

University of Rochester - Department of Economics; National Bureau of Economic Research (NBER)

Yongsung Chang

University of Rochester - Department of Economics; Yonsei University - Department of Economics

Date Written: March 2001

Abstract

We examine the impact of wage stickiness when employment has an effort as well as hours dimension. Despite wages being predetermined, the labor market clears through the effort margin. Consequently, welfare costs of wage stickiness are potentially much, much smaller.

Suggested Citation

Bils, Mark and Chang, Yongsung, Welfare Costs of Sticky Wages When Effort Can Respond (March 2001). PIER Working Paper No. 01-026. Available at SSRN: https://ssrn.com/abstract=279307 or http://dx.doi.org/10.2139/ssrn.279307

Mark Bils

University of Rochester - Department of Economics ( email )

Harkness Hall
Rochester, NY 14627-0158
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Yongsung Chang (Contact Author)

University of Rochester - Department of Economics ( email )

Harkness Hall
Rochester, NY 14627
United States

Yonsei University - Department of Economics ( email )

50 Yonsei-Ro
Seoul, 120-749
Korea

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