We provide a finite-horizon counterpart to the Shapiro and Stiglitz model of unemployment to show how workers' effort falls as they approach the end of an employment spell. The model provides a reason for wages rising more rapidly than productivity.
|Number of pages||4|
|Publication status||Published - 2015|
Bibliographical noteFunding Information:
Financial support from the Icelandic Centre for Research , grant 130551-053 and the University of Iceland Research Fund is gratefully acknowledged. We are grateful to an anonymous referee for comments.
© 2015 Elsevier B.V.
- Finite horizons