← Search

The Fair Wage-Effort Hypothesis and Unemployment

George A. Akerlof; Janet L. Yellen

University of California, Berkeley

This paper introduces the fair wage-effort hypothesis and explores its implications. This hypothesis is motivated by equity theory in social psychology and social exchange theory in sociology. According to the fair wage-effort hypothesis, workers proportionately withdraw effort as their actual wage falls short of their fair wage. Such behavior causes unemployment and is also consistent with observed cross-section wage differentials and unemployment patterns.

DOI

10.2307/2937787

Volume

105 (2)

Pages

255

Export

BibTeX

Sources

openalex crossref