Efficiency Wages and Labor Mobility in an Open Economy

The paper analyzes the role of labor market segmentation and relative wage rigidity in the transmission process of macroeconomic shocks in a two-sector optimizing model of a small open economy. The analysis is first conducted in the context of perfect intersectoral labor mobility. The discussion is...

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Bibliographic Details
Main Author: Santaella, Julio
Other Authors: Agénor, Pierre-Richard
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 1993
Series:IMF Working Papers
Subjects:
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
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100 1 |a Santaella, Julio 
245 0 0 |a Efficiency Wages and Labor Mobility in an Open Economy  |c Julio Santaella, Pierre-Richard Agénor 
260 |a Washington, D.C.  |b International Monetary Fund  |c 1993 
300 |a 40 pages 
653 |a Real wages 
653 |a Labour; income economics 
653 |a Employment; Economic theory 
653 |a Wages, Compensation, and Labor Costs: General 
653 |a Labor markets 
653 |a Aggregate Labor Productivity 
653 |a Unemployment 
653 |a Demand and Supply of Labor: General 
653 |a Aggregate Human Capital 
653 |a Labor 
653 |a Labor Economics: General 
653 |a Labor Demand 
653 |a Labor market 
653 |a Macroeconomics 
653 |a Wages 
653 |a Intergenerational Income Distribution 
653 |a Employment 
653 |a Labor economics 
700 1 |a Agénor, Pierre-Richard 
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989 |b IMF  |a International Monetary Fund 
490 0 |a IMF Working Papers 
028 5 0 |a 10.5089/9781451850161.001 
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520 |a The paper analyzes the role of labor market segmentation and relative wage rigidity in the transmission process of macroeconomic shocks in a two-sector optimizing model of a small open economy. The analysis is first conducted in the context of perfect intersectoral labor mobility. The discussion is then extended to consider the existence of short-run constraints on labor movements. The results highlight the role of efficiency considerations in the behavior of sectoral wages. A deflationary policy induces a reallocation of labor across sectors, but has no long-run effect on the unemployment rate