This paper updates the Shapiro-Stiglitz (1984) efficiency wage model with technical progress. Involuntary unemployment may not necessarily exist in a long-run equilibrium even when efficiency wages resulting from competitive markets are paid. The effect of reducing real (monetary) unemployment...

In this paper we analyze the effects of global and national technological change on employment levels and relative wages in an integrated two-country world ("Europe" and "America"), where both countries are characterized by equilibrium unemployment due to fair wage constraints. The asymmetry...

A model is developed to analyse the relation between wages and technological complexity, as characterised by the "O-ring" theory of production. In equilibrium, the adoption of a relatively complex technology induces the employer to pay higher wages. We argue that the model can explain increased...

Although the Industrial Revolution is often characterized as the culmination of a process of commercialisation, the precise nature of such a link remains unclear. This paper models and analyzes such link: the role of commercialisation in raising efficiency wages as impersonal and anonymous...

This book explores the widening gap between the wage packets of skilled and unskilled workers that has become a pressing issue for all states in the globalized world economy. Comparing the experiences of more and less developed economies, chapters analyse the underlying causes and key social...