This paper examines how employer- and worker-specific productivity shocks transmit to earnings and employment in an … backloaded in good times and frontloaded in bad times. We prove that there exists a unique spot target wage, which serves as an … attraction point for smooth wage adjustments. The structural model is estimated on matched employer-employee data from Sweden …

This paper examines how employer- and worker-specific productivity shocks transmit to earnings and employment in an … backloaded in good times and frontloaded in bad times. We prove that there exists a unique spot target wage, which serves as an … attraction point for smooth wage adjustments. The structural model is estimated on matched employer-employee data from Sweden …

Conventional theory predicts that productivity gains lead to hikes in real pay. Efficiency wage theory hypothesizes … efficiency benefit of corporatism. For laborers in manufacturing, we find that wage hikes result in productivity gains. Managers … that pay increases can lead to productivity improvements. But would such results be observed in a corporatist economy with …