Talk:Efficiency wage
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Another criticism
[edit]Another criticism of the Shapiro Stiglitz model (and to some extent efficiency wage models in general) is that one of the conclusions of the model(s) is that technological progress/exogenous productivity growth would push unemployment down to zero which is not what happens in the real world (as far as this goes the "natural rate" or "Nairu" idea fares much better). radek 06:36, 3 February 2006 (UTC)
Implications
[edit]This wage model implies that a worker's performance at work is proportional to the ratio of their actual wage to their subjectively-assessed "proper" wage. In other words, a person who feels undervalued won't work as hard, and contrariwise, a person who feels overvalued must work harder (at least to a point). If true, this would tie in to the pygmalion effect. --76.217.95.43 (talk) 08:19, 24 February 2008 (UTC)
Dr. Guerrazzi's comment on this article
[edit]Dr. Guerrazzi has reviewed this Wikipedia page, and provided us with the following comments to improve its quality:
An important implication of the shirking approach which is not considered in text is the endogenity of labour supply; indeed, according to the model by Shapiro-Stiglitz (1974) unemployment act as threat for workers. The stronger the threat, the more the workers will be willing to work by behaving correctly.
The selection approach should be revised in order to explain the so-called Solow condition according to which the optimal efficiency-wage for the individual firm is the one according to which the elasticity of the effort function with respect to the wage is equal to 1. See Solow, R.M. (1979), Another Possible Source of Wage Stickiness, Journal of Macroeconomics, Vol. 1, No. 1, pp. 79-82. Furthermore, an important implication of this approach is the productivity shock do not affect wages but only the level of employment.
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Dr. Guerrazzi has published scholarly research which seems to be relevant to this Wikipedia article:
- Reference : Guerrazzi, Marco, 2015. "Increasing returns in matching and labour market dynamics: Comments on indeterminacy and search theory," MPRA Paper 61947, University Library of Munich, Germany.
ExpertIdeasBot (talk) 18:40, 27 June 2016 (UTC)
Dr. Baert's comment on this article
[edit]Dr. Baert has reviewed this Wikipedia page, and provided us with the following comments to improve its quality:
I really like this page, because of its clear and multidisciplinary nature.
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We believe Dr. Baert has expertise on the topic of this article, since he has published relevant scholarly research:
- Reference : Baert, Stijn & Verhaest, Dieter, 2014. "Unemployment or Overeducation: Which is a Worse Signal to Employers?," IZA Discussion Papers 8312, Institute for the Study of Labor (IZA).
ExpertIdeasBot (talk) 20:29, 1 July 2016 (UTC)
Dr. Holden's comment on this article
[edit]Dr. Holden has reviewed this Wikipedia page, and provided us with the following comments to improve its quality:
The article provides a good overview of various efficiency wage theories. However, the last section, under the headline General explanation, is very weak, with insufficient explanations and assumptions, and some conclusions that appear incorrect. It does not follow the Krugman blog which is claimed as a source - the Krugman blog makes a simpler point, which is correct. The description of the sociological theories is fine, although at some places, the theories are presented as facts, and not as plausible theories about human behavior. The claim that a neoclassical model cannot explain why firms do not fire workers who turn out to be less productive should be made weaker, e.g. by referring to a "standard neoclassical model". One would expect that a neoclassical model can explain this phenomenon by insurance and/or reputation effects.
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We believe Dr. Holden has expertise on the topic of this article, since he has published relevant scholarly research:
- Reference : Steinar Holden & Fredrik Wulfsberg, 2009. "Wage rigidity, institutions, and inflation," Working Paper 2009/02, Norges Bank.
ExpertIdeasBot (talk) 18:53, 26 July 2016 (UTC)
In the General Expectations section, the product of positive derivatives doesn't necessarily offset the -L, so the final identity doesn't follow. If you add in the assumptions (per Krugman's example) that L was chosen to maximize P, that changing w has no follow-on effects on optimal L (by the envelope theorem, Krugman says), and that dE/dw is "significant," then "a small rise in wages has a negligible effect on profits" (Krugman), and dP/dw = 0. — Preceding unsigned comment added by 173.127.211.102 (talk) 21:04, 19 February 2019 (UTC)
Dr. Schlicht's comment on this article
[edit]Dr. Schlicht has reviewed this Wikipedia page, and provided us with the following comments to improve its quality:
This article is, I think, very good.
My main suggestion is to mention some market implications of efficiency wages. I have outlined some of them in a recent paper http://wol.iza.org/articles/efficiency-wages-variants-and- implications/long. (Mainly income taxation, size-wage effect, congestion-wage effect, discrimination, overqualification.) The bibliography there is too selective, due to style requirements by the journal. The bibliography may be better usable in the underlying discussion paper https://epub.ub.uni-muenchen.de/25168/1/schlicht_2016_%20efficiency_wages.pdf. As I am the copyright owner, Wikipedia may feel free to draw on this article in any way.
Some remarks on a small but intricate point: It is mentioned at some points that efficiency wages are not market clearing. This is true for discipline wages, turnover wages, morale (Alkerlof) wages, but not necessarily for selection wages, because here the variation in the hiring standard may clear the market in some sense, although there is oversupply of workers who could do the job but are less qualified, as they are not meeting the hiring standard. This is explained in section 6 of http://onlinelibrary.wiley.com/doi/10.1111/j.1467-999X.2005.00216.x/abstract. (A non-gated pre-print is available at http://repec.iza.org/dp481.pdf, here look at section 7). This is a difficult issue to explain in a Wikipedia article. Perhaps it is best to leave the phrasings as they are.
I hope that these comments are of some use.
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We believe Dr. Schlicht has expertise on the topic of this article, since he has published relevant scholarly research:
- Reference 1: Schlicht, Ekkehart, 2011. "Wage Setting in Modern Labor Markets: Neither Fair Nor Efficient," IZA Policy Papers 26, Institute for the Study of Labor (IZA).
- Reference 2: Schlicht, Ekkehart, 2007. "Wage Dispersion and Overqualification as Entailed by Reder Competition," Discussion Papers in Economics 1976, University of Munich, Department of Economics.