Theories of Pay and Unemployment: Survey Evidence from Swedish Manufacturing Firms

Abstract

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Fairness and Redistribution: US versus Europe

“…6 In Benabou (2000), on the other hand, multiplicity originates in imperfect credit and insurance markets. When inequality is low, there is strong political support for redistribution as a way to correct for capital-market imperfections, which in turn results to high efficiency and low inequality; when instead inequality 5 Actually, experimental studies and the evidence on charitable donations suggest that Americans are perhaps more altruistic that Europeans, which alone would predict more rather than less redistribution in the United States.…”

Relative wage concern: the missing piece in the contract multiplier?

“…Campbell and Kamlani (1997) (Table II) report results from other studies based on survey data from firms which suggest that relative wage concern is very significant, especially in heavily unionized firms (Agell and Lundborg (1995)). …”

Interdependent preferences and segregating equilibria

“…For instance, Acemoglu [1] shows, with US data, that the sorting of workers across occupations increased between 1983 and 1993. 2 Davis and Haltinwanger [17] had already observed that the rise of wage inequality in America is imputable in part to differently abled workers sorting themselves across firms: "The tremendous magnitude of the rise in the size-wage gap indicates that sorting by worker ability across plants of different sizes probably increased over time (pp. 156-157)."…”

“…The less productive, on the other hand, are paid more than their marginal productivity to compensate for their "suffering" caused by an inferior wage. 15 Fershtman et al [22], in a similar framework, explore the effects of status on effort, and show that firms with 6 Other papers which offer survey evidence on the importance of equity concerns in organizations are: Blinder and Choi [8], Bewley [6], Agell and Lundborg [2,3], or Campbell and Kamlani [15]. 7 Bewley [7, Table 6.5].…”