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We present a new theory of wage adjustment, based on worker loss aversion. In line with prospect theory, the workers … price. Firms adjust wages flexibly in response to variations in labor demand. The resulting theory of wage adjustment is …
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The paper analyzes the contemporary organizational restructuring of production and work within firms. We emphasize the shift from a "Tayloristic" organization of work (characterized by significant specialization by tasks) to a "holistic" organization (featuring job rotation, integration of tasks...
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The analysis provides a new explanation for two widespread problems concerning European unemployment policy: the disappointingly small effect of many past reform measures on unemployment, and the political difficulties in implementing more extensive reform programs. We argue that the heart of...
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This paper challenges what is the standard account of UK unemployment, namely that the major swings in unemployment over the past 25 years are due predominantly to movements in the underlying empirical “natural rate of unemployment” (NRU). Our analysis suggests that the British NRU has...
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