Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/21040 
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dc.contributor.authorEarle, John S.en
dc.contributor.authorSabirianova, Klara Z.en
dc.date.accessioned2009-01-28T16:18:52Z-
dc.date.available2009-01-28T16:18:52Z-
dc.date.issued2000-
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
dc.language.isoengen
dc.publisher|aInstitute for the Study of Labor (IZA) |cBonnen
dc.relation.ispartofseries|aIZA Discussion Papers |x196en
dc.subject.jelP23en
dc.subject.jelL14en
dc.subject.jelJ30en
dc.subject.jelO17en
dc.subject.jelJ33en
dc.subject.jelP31en
dc.subject.jelK42en
dc.subject.ddc330en
dc.subject.keywordWage arrearsen
dc.subject.keywordcontractual failureen
dc.subject.keywordinstitutionsen
dc.subject.keywordinstitutional lock-inen
dc.subject.keywordsocial interactionsen
dc.subject.keywordRussiaen
dc.subject.keywordtransitionen
dc.subject.stwLohnen
dc.subject.stwVerbindlichkeitenen
dc.subject.stwHysteresisen
dc.subject.stwLohntheorieen
dc.subject.stwArbeitsmarkttheorieen
dc.subject.stwSoziale Beziehungenen
dc.subject.stwBetrieblicher Konflikten
dc.subject.stwÜbergangswirtschaften
dc.subject.stwSchätzungen
dc.subject.stwTheorieen
dc.subject.stwRusslanden
dc.subject.stwLohnrückständeen
dc.subject.stwwage arrearsen
dc.titleEquilibrium Wage Arrears: A Theoretical and Empirical Analysis of Institutional Lock-In-
dc.typeWorking Paperen
dc.identifier.ppn835458792en
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen

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