Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/21040
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dc.contributor.authorEarle, John S.en_US
dc.contributor.authorSabirianova, Klara Z.en_US
dc.date.accessioned2009-01-28T16:18:52Z-
dc.date.available2009-01-28T16:18:52Z-
dc.date.issued2000en_US
dc.identifier.urihttp://hdl.handle.net/10419/21040-
dc.description.abstractWe present a model of wage contract violation that implies a possibility of multiple equilibria inthe level of arrears. Positive feedback arises because each employer's arrears affect the costsof late payment faced by other employers operating in the same labor market, resulting in anetwork externality or strategic complementarity in the adoption of the practice. We study thecase of three equilibria, distinguishing two that are stable: the "punctual payment equilibrium"and the "late payment equilibrium." Our econometric analysis of linked employer-employee datafor Russia supports the model's contention that the firm's costs of wage arrears – as embodiedin worker effort, quit and strike behavior, and the probability of legal penalties – are attenuatedby arrears in the local labor market. We estimate the arrears reaction function implied by themodel, showing that it exhibits strongly positive feedback, and that the theoretical conditions formultiple equilibria under symmetric local labor market competition are satisfied in 1995 and1998. Simulation results imply a late payment equilibrium characterized by six monthly overduewages for a typical worker in 1995 and nine in 1998.en_US
dc.language.isoengen_US
dc.publisher|aInstitute for the Study of Labor (IZA) |cBonnen_US
dc.relation.ispartofseries|aIZA Discussion paper series |x196en_US
dc.subject.jelP23en_US
dc.subject.jelL14en_US
dc.subject.jelJ30en_US
dc.subject.jelO17en_US
dc.subject.jelJ33en_US
dc.subject.jelP31en_US
dc.subject.jelK42en_US
dc.subject.ddc330en_US
dc.subject.keywordWage arrearsen_US
dc.subject.keywordcontractual failureen_US
dc.subject.keywordinstitutionsen_US
dc.subject.keywordinstitutional lock-inen_US
dc.subject.keywordsocial interactionsen_US
dc.subject.keywordRussiaen_US
dc.subject.keywordtransitionen_US
dc.subject.stwLohnen_US
dc.subject.stwVerbindlichkeitenen_US
dc.subject.stwHysteresisen_US
dc.subject.stwLohntheorieen_US
dc.subject.stwArbeitsmarkttheorieen_US
dc.subject.stwSoziale Beziehungenen_US
dc.subject.stwBetrieblicher Konflikten_US
dc.subject.stwÜbergangswirtschaften_US
dc.subject.stwSchätzungen_US
dc.subject.stwTheorieen_US
dc.subject.stwRusslanden_US
dc.subject.stwLohnrückständeen_US
dc.subject.stwwage arrearsen_US
dc.titleEquilibrium Wage Arrears: A Theoretical and Empirical Analysis of Institutional Lock-Inen_US
dc.typeWorking Paperen_US
dc.identifier.ppn835458792en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-

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