Unemployment Stigma and Multiple Labour Market Equilibria: A Social-Psychological Interpretation of Hysteresis |
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| Authors: | John G Sessions |
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| Institution: | John G. Sessions, Department of Economics, Loughborough University of Technology. |
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| Abstract: | ABSTRACT: This paper supplements a simple one period non-shirking efficiency wage model with behavioural assumptions drawn from the social-psychological literature. A model of social interaction is developed in which the status associated with various labour market options yields implications for the shape of the non-shirking constraint and, thereby, for the number and type of labour market equilibria. The significance of such a finding for the existence of unemployment hysteresis is explored. |
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