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Inertia in employment (الإنجليزية)

This paper is concerned with the micro-economic foundations of employment determination at an elementary level and, in particular, with an explanation as to why employment may be insensitive to changes in product market demand. It focuses on the short-run equilibrium of a firm. The assumed objective of the firm is to maximize profits with given capital stock. Two types of labor are distinguished: the existing workers currently employed by the firm, and others who might be recruited. A crucial assumption in the analysis allows that internal labor is potentially cheaper than external labor of equal efficiency. An attractive contract is one under which both the firm and the employees are better off with each other than without. The analysis concludes that the mutual interest of the firm and its employees in reaching efficient contracts will lead to institutional forms in the labour market in support of behaviour which is different from profit maximization by the firm, given the wage rate, as normally assumed.

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نسخة رسمية من الوثيقة (قد تضم توقيعات، الخ)