This chapter assesses some of the recent literature on ‘contract inefficiency’ in employment. Two main sources of potential inefficiency in labour markets have been widely discussed in the literature: (i) the process by which employee meets employer to start negotiations is inefficient; and (ii) the wage/employment/effort outcomes agreed once employer and employee (or their representatives) have started negotiating are inefficient. It is the latter to which I apply the term ‘contract inefficiency’. The former gives rise to the inefficiencies discussed in the search and matching literature. These are well surveyed in Mortensen (1986) and, although that survey is now somewhat dated, I do not attempt to update it here.
Weitere Kapitel dieses Buchs durch Wischen aufrufen
- Contract Inefficiency, Wages and Employment: An Assessment
James M. Malcomson
- Palgrave Macmillan UK
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