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| Author: | Leamer, E. |
| Title: | Effort, wages, and the international division of labour |
| Journal: | Journal of Political Economy
1999 : DEC, VOL. 107:6, part 1, p. 1127-1162 |
| Index terms: | POLITICAL ECONOMY PAY DIVISION OF LABOUR |
| Language: | eng |
| Abstract: | This paper embeds variable effort into a traditional two-sector Heckscher-Ohlin model of international competition. Effort enters a production function as total factor productivity, and on the assumption that effort does not affect capital depreciation, the capital cost savings from high-effort operations are passed on to workers. The labor market thus offers a set of contracts with higher wages compensating for higher effort. |
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