Efficiency Wages and Labor Mobility in an Open Economy
| Author | : Pierre-Richard Agénor |
| Publisher | : International Monetary Fund |
| Total Pages | : 42 |
| Release | : 1993-10-01 |
| ISBN-10 | : 9781451850161 |
| ISBN-13 | : 1451850166 |
| Rating | : 4/5 (166 Downloads) |
Download or read book Efficiency Wages and Labor Mobility in an Open Economy written by Pierre-Richard Agénor and published by International Monetary Fund. This book was released on 1993-10-01 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper analyzes the role of labor market segmentation and relative wage rigidity in the transmission process of macroeconomic shocks in a two-sector optimizing model of a small open economy. The analysis is first conducted in the context of perfect intersectoral labor mobility. The discussion is then extended to consider the existence of short-run constraints on labor movements. The results highlight the role of efficiency considerations in the behavior of sectoral wages. A deflationary policy induces a reallocation of labor across sectors, but has no long-run effect on the unemployment rate.
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