Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/36159
Authors: 
Chau, Nancy H.
Year of Publication: 
2009
Series/Report no.: 
IZA Discussion Papers 4363
Abstract: 
This paper presents a capability-augmented model of on the job search, in which sweatshop conditions stifle the capability of the working poor to search for a job while on the job. The augmented setting unveils a sweatshop equilibrium in an otherwise archetypal Burdett-Mortensen economy, and reconciles a number of oft noted yet perplexing features of sweatshop economies. We demonstrate existence of multiple rational expectation equilibria, graduation pathways out of sweatshops in complete absence of enforcement, and country-specific efficiency and distributional responses to competitive forces and social safety nets depending precisely on whether graduation criteria are met.
Subjects: 
Sweatshop equilibrium
on the job search
capability deficits
JEL: 
J64
J88
O15
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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