Wage Rigidity and Social Norms in Experimental Labour Markets

Business & Finance, Human Resources & Personnel Management
Cover of the book Wage Rigidity and Social Norms in Experimental Labour Markets by Anne-Kathrin Wippermann, GRIN Publishing
View on Amazon View on AbeBooks View on Kobo View on B.Depository View on eBay View on Walmart
Author: Anne-Kathrin Wippermann ISBN: 9783638516037
Publisher: GRIN Publishing Publication: July 2, 2006
Imprint: GRIN Publishing Language: English
Author: Anne-Kathrin Wippermann
ISBN: 9783638516037
Publisher: GRIN Publishing
Publication: July 2, 2006
Imprint: GRIN Publishing
Language: English

Bachelor Thesis from the year 2006 in the subject Economics - Job market economics, grade: 1,0, University of Göttingen, 46 entries in the bibliography, language: English, abstract: Are wages rigid, and if so, why? The question raised has attracted economists' attention ever since Keynes (1936, p. 289) suggested that wages were rigid and could lead to involuntary unemployment (Gächter, 2001, p. 478). This wage rigidity can be defined as the tendency of wages to react slowly, if at all, to excess labour supply and/or demand (Wachtel, 1994, p. 482). Keynes' theory is at odds with the neoclassical model of the labour market, in which wages are flexible and therefore full employment at a market-clearing wage will ultimately be reached (Fischer and Heier, 1983, p. 56). Due to the clash between Keynes' theory and the neoclassical model, a lively discussion among economists arose as to whether wage rigidity existed or not. Some economists, such as Lucas and Rapping (1969, p. 748), claimed that wage rigidity was an illusion and that existing unemployment was voluntary, i.e. real wages were below workers' reservation wages. Others claimed that wages were rigid and started to implant sociological findings into economic models, which gave further explanations as to why wage rigidity existed. As a consequence of this debate it became clear that evidence was needed as to which of the models and theories actually applied to real world labour markets. Some economists went about this by conducting surveys in the labour market (see, e.g., Bewley, 1999, and Campbell III. and Kamlani, 1997). Others used experimental methods to simulate labour markets and test theories of wage rigidity for their robustness. Their findings, which generally confirm the sociological approaches to wage rigidity, will be the basis of this paper.

View on Amazon View on AbeBooks View on Kobo View on B.Depository View on eBay View on Walmart

Bachelor Thesis from the year 2006 in the subject Economics - Job market economics, grade: 1,0, University of Göttingen, 46 entries in the bibliography, language: English, abstract: Are wages rigid, and if so, why? The question raised has attracted economists' attention ever since Keynes (1936, p. 289) suggested that wages were rigid and could lead to involuntary unemployment (Gächter, 2001, p. 478). This wage rigidity can be defined as the tendency of wages to react slowly, if at all, to excess labour supply and/or demand (Wachtel, 1994, p. 482). Keynes' theory is at odds with the neoclassical model of the labour market, in which wages are flexible and therefore full employment at a market-clearing wage will ultimately be reached (Fischer and Heier, 1983, p. 56). Due to the clash between Keynes' theory and the neoclassical model, a lively discussion among economists arose as to whether wage rigidity existed or not. Some economists, such as Lucas and Rapping (1969, p. 748), claimed that wage rigidity was an illusion and that existing unemployment was voluntary, i.e. real wages were below workers' reservation wages. Others claimed that wages were rigid and started to implant sociological findings into economic models, which gave further explanations as to why wage rigidity existed. As a consequence of this debate it became clear that evidence was needed as to which of the models and theories actually applied to real world labour markets. Some economists went about this by conducting surveys in the labour market (see, e.g., Bewley, 1999, and Campbell III. and Kamlani, 1997). Others used experimental methods to simulate labour markets and test theories of wage rigidity for their robustness. Their findings, which generally confirm the sociological approaches to wage rigidity, will be the basis of this paper.

More books from GRIN Publishing

Cover of the book Translation problems in reference to thought and reality by Anne-Kathrin Wippermann
Cover of the book Melville's 'Moby-Dick, or The Whale' - an Attack on Calvinism by Anne-Kathrin Wippermann
Cover of the book Dissertation Proposal: Development of a recommendation on the implementation of IT service management on the basis of ITIL in SMEs by Anne-Kathrin Wippermann
Cover of the book The position of women in the New World's Puritan Society in the seventeenth century by Anne-Kathrin Wippermann
Cover of the book Emily Dickinson's Death Poetry by Anne-Kathrin Wippermann
Cover of the book Emotional vs. logical/rational decision making - A research project about the role of feelings in the process of decision making by Anne-Kathrin Wippermann
Cover of the book Two-sided markets and their relevance for competition policy by Anne-Kathrin Wippermann
Cover of the book Maintaining a Global Communication Network by Anne-Kathrin Wippermann
Cover of the book Governing family enterprises and implications for performance - a financial perspective by Anne-Kathrin Wippermann
Cover of the book Archaic republican values and Confucianism by Anne-Kathrin Wippermann
Cover of the book Issues in Australian Studies: National Identity by Anne-Kathrin Wippermann
Cover of the book Between Heads and Phrases by Anne-Kathrin Wippermann
Cover of the book Buyout Basics by Anne-Kathrin Wippermann
Cover of the book Das Sortiment an Marktbedingungen anpassen - Unterrichtsstunde für eine Berufsschulklasse von Groß- und Außenhandelskaufleuten by Anne-Kathrin Wippermann
Cover of the book Exile and 'Heimat': Tensions in Lion Feuchtwanger's Historical Fiction and Drama 1933-1951 by Anne-Kathrin Wippermann
We use our own "cookies" and third party cookies to improve services and to see statistical information. By using this website, you agree to our Privacy Policy