(DP 1994-03) Effort Standards and the Velocity of Production: A Theory of Labor Time, and Wage Funds

Abstract

A model of dual measures is proposed to explain the economic relevance of time for labor services. The paper investigates two significant temporal decisions of the firm with respect to wages and employment: the investment in labor-time and the use of a circulating wage fund to finance this investment. The use-efficiency of a firm's investment in labor-time and the cost of wage funds employed are shown to be detemined by variables, both internal and external to the firm besides effort supplied by its work force.