A number of authors have proposed theories of efficiency wages to explain the behaviour of aggregate labor markets. According to these theories, firms do not adjust wages downwards despite available unemployed job seekers, because lower wages would induce hired workers to shirk more often, which...

Introduction -- Part 1 The basic analytical framework -- Conceptions of individual well being -- Valuation of functioning bundles and interpersonal comparisons of well being -- Freedom and individual well being -- Freedom A re examination of the concept -- Part 2 Some applications -- Measurement...