unemployment. We show that the socially efficient incentive power of the equilibrium wage contract is constrained in the absence of … unemployment benefits. We then apply the model to explain the recent increase in performance-pay contracts. Within our model, this … factors is an increase in the equilibrium unemployment rate. …

unemployment. We show that the incentive power of the equilibrium wage contract is constrained socially efficient in the absence of … unemployment benefits. We then apply the model to explain the recent increase in performance-pay contracts. Within our model, this … factors is an increase in the equilibrium unemployment rate. …

The unemployment rate is expected to average 10.2 percent for 2010, 9.1 percent for 2011, and 7.3 percent for 2012 …