Contractual Incompleteness, Unemployment, and Labour Market Segmentation
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Contractual Incompleteness, Unemployment, and Labour Market Segmentation. / Altmann, Steffen; Falk, Armin; Grunewald, Andreas; Huffman, David.
I: Review of Economic Studies, Bind 81, Nr. 1, 01.01.2014, s. 30-56.Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt
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TY - JOUR
T1 - Contractual Incompleteness, Unemployment, and Labour Market Segmentation
AU - Altmann, Steffen
AU - Falk, Armin
AU - Grunewald, Andreas
AU - Huffman, David
N1 - JEL Classification: C91, J41, J64, M52, M55
PY - 2014/1/1
Y1 - 2014/1/1
N2 - This article provides evidence that involuntary unemployment, and the segmentation of labour markets into firms offering "good" and "bad" jobs, may both arise as a consequence of contractual incompleteness.We provide a simple model that illustrates how unemployment and market segmentation may jointly emerge as part of a market equilibrium in environments where work effort is not third-party verifiable. Using experimental labour markets that differ only in the verifiability of effort, we demonstrate empirically that contractual incompleteness can cause unemployment and segmentation. Our data are also consistent with the key channels through which the model explains the emergence of both phenomena.
AB - This article provides evidence that involuntary unemployment, and the segmentation of labour markets into firms offering "good" and "bad" jobs, may both arise as a consequence of contractual incompleteness.We provide a simple model that illustrates how unemployment and market segmentation may jointly emerge as part of a market equilibrium in environments where work effort is not third-party verifiable. Using experimental labour markets that differ only in the verifiability of effort, we demonstrate empirically that contractual incompleteness can cause unemployment and segmentation. Our data are also consistent with the key channels through which the model explains the emergence of both phenomena.
KW - Contractual incompleteness
KW - Dual labour markets
KW - Incentives
KW - Laboratory experiment
KW - Unemployment
U2 - 10.1093/restud/rdt034
DO - 10.1093/restud/rdt034
M3 - Journal article
AN - SCOPUS:84893413954
VL - 81
SP - 30
EP - 56
JO - Review of Economic Studies
JF - Review of Economic Studies
SN - 0034-6527
IS - 1
ER -
ID: 126372716