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Title:Minimum wages and excessive effort supply PDF Logo
Authors:Kräkel, Matthias
Schöttner, Anja
Issue Date:2009
Series/Report no.:Bonn econ discussion papers 2009,8
Abstract:It is well-known that, in static models, minimum wages generate positive worker rents and, consequently, inefficiently low effort. We show that this result does not necessarily extend to a dynamic context. The reason is that, in repeated employment relationships, firms may exploit workers future rents to induce excessively high effort.
Subjects:bonuses
limited liability
minimum wages
JEL:D82
D86
J33
Document Type:Working Paper
Appears in Collections:Bonn Econ Discussion Papers, Bonn Graduate School of Economics (BGSE), Universität Bonn

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