Minimum Wages and Excessive Effort Supply

It is well-known that, in static models, minimum wages generate positive worker rents and, consequently, ine?ciently low effort. We show that this result does not necessarily extend to a dynamic context. The reason is that, in repeated employment relationships, ?rms may exploit workers’ future rents to induce excessively high effort.

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Year of publication:	2009
Authors:	Kräkel, Matthias ; Schöttner, Anja
Publisher:	Bonn : University of Bonn, Bonn Graduate School of Economics (BGSE)
Subject:	Mindestlohn \| Leistungsmotivation \| Arbeitsvertrag \| Vertragstheorie \| Theorie \| bonuses \| limited liability \| minimum wages

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Series:	Bonn Econ Discussion Papers ; 8/2009
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	603372740 [GVK] hdl:10419/37039 [Handle] RePEc:zbw:bonedp:82009 [RePEc]
Classification:	D82 - Asymmetric and Private Information ; D86 - Economics of Contract: Theory ; J33 - Compensation Packages; Payment Methods
Source:	EconStor

Persistent link: https://www.econbiz.de/10010270019