The article offers a model of wage and working-time setting by profit-maximizing firms in a competitive labor market with homogeneous workers. Emphasis is placed on the role played by both fixed costs of labor and workers’ varying effectiveness in time. Competition among firms implies a constraint on the utility level associated to the labor contract. The model contributes to explain insiders’ rationing and other contemporary stylized facts, and lends itself to a particular approach to the problem of evaluating the consequences of mandatory working-time reductions.
CONTENSOU, F. et VRANCEANU, R. (1998). A Model of Working Time under Utility Competition in the Labor Market. Journal of Economics.