Shirking, Standards and the Probability of Detection

John G. Sessions, John D. Skatun

Research output: Working paperDiscussion paper

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By relaxing the common efficiency wage assumption of exogenous shirking detection probabilities, we demonstrate how standards and efficiency wages are related. In a more general setting where the probability of detection depends upon the equilibrium effort level of non-shirkers, we show that the uniformly positive (negative) supply-side relationship between wages (unemployment insurance) and effort is no longer guaranteed. Profit maximization on the part of the firm, however, ensures that effort will depend positively (negatively) on wages (unemployment insurance) in equilibrium.
Original languageEnglish
Place of PublicationAberdeen
PublisherUniversity of Aberdeen: Business School
Number of pages21
Publication statusPublished - Mar 2016

Publication series

NameDiscussion Paper in Economics
PublisherUniversity of Aberdeen
ISSN (Electronic)0143-4543


  • Monitoring
  • standards
  • efficiency wages


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