74. Sanjay Banerji, Manas Ranjan Gupta

Abstract

The purpose of this paper is to analyze the determination of wage rates in a setting where the health capital of labor accumulates over time. Our conclusions are (1) the efficiency wage in a dynamic framework exceeds the static wage rate and (2) there is a possibility of multiple steady state equilibria. We also conduct some comparative static exercises with respect to some key parameters.

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