Efficiency wages lead to lower unemployment rates and higher wages.
The article "Efficiency Wages: Models of Unemployment, Layoffs, and Wage Dispersion" by Andrew Weiss explores how paying higher wages can lead to lower unemployment rates and fewer layoffs in a company. The study suggests that when workers are paid more than the market rate, they are more motivated to work efficiently and stay with the company. This approach can also help reduce wage inequality among employees.