Quarterly Journal of Economics Vol. 105 No. 2 1990
The Fair Wage-Effort Hypothesis and Unemployment
Abstract
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
- Issue
- 2
- Pages
- 255
- Sources
- openalex crossref