Nutritional Efficiency Wages and Unemployment: Where's the Beef?. (2nd September 2014)

• Record Type: Journal Article
• Authors: Powell, Benjamin; Murphy, Ryan
• Is Part Of: American journal of agricultural economics. Volume 97:Number 2(2015)
• Page Start: 405
• Page End: 413
• Publication Date: 2014-09-02
• Subjects: Efficiency wages -- nutrition and economic development -- unemployment; Agriculture -- Economic aspects -- Periodicals; Agriculture -- Periodicals; 338.105
• DOI: 10.1093/ajae/aau072
• Languages: English
• ISSNs: 0002-9092

Abstract

Abstract: We modify the standard nutritional efficiency wage model to allow for the fact that employers can directly provide calories to their workers rather than paying a higher wage to induce employees to spend more on their own caloric consumption. We derive the various theoretical outcomes that are possible depending on the assumptions about the transaction costs of directly providing calories. We argue that in most real‐world situations the ability of employers to directly provide calories undermines the traditional efficiency wage theory as a cause of equilibrium unemployment.