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Nicolas Piluso Pr and Gabriel Colletis Pr
''Shareholder value and equilibrium rate of unemployment''
( 2012, Vol. 32 No.4 )
The aim of this article is to analyse the consequences of the constraint of shareholder value creation on wages and on unemployment rates in equilibrium. We will show that the shareholder value created by a firm directly depends on the payroll. Therefore, both the firm's and the Unions' new maximisation programs are considerably modified. The main result of this analysis is that a switch from profit maximisation to EVA maximisation leads to an increase in unemployment rates. Furthermore, the unemployment rate now depends on new financial variables.
Keywords: equilibrium unemployment, shareholder value, equilibrium wages, trade-union negotiations
JEL: E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment: General (includes Measurement and Data)
J2 - Demand and Supply of Labor: General
Manuscript Received : Feb 22 2012 Manuscript Accepted : Nov 29 2012

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