When Higher Incomes Reduce Welfare: Queues, Labor Supply, and Macro Equilibrium in Socialist Economies

S-Tier
Journal: Quarterly Journal of Economics
Year: 1992
Volume: 107
Issue: 3
Pages: 907-920

Score contribution per author:

8.043 = (α=2.01 / 1 authors) × 4.0x S-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Starting from a micro model of consumer behavior under rationing by queuing that utilizes Gary Becker's "Allocation of Time" framework, we develop a simple macroeconomic model of a socialist economy. The "length of the queue" is the key endogenous variable that equilibrates aggregate supply and aggregate demand. Comparative statics analysis shows that an increase in wages over money prices brings about longer queues that reduce labor supply, output, and welfare. When shortages grow beyond a certain critical level, queues fail to sustain aggregate equilibrium in the economy.

Technical Details

RePEc Handle
repec:oup:qjecon:v:107:y:1992:i:3:p:907-920.
Journal Field
General
Author Count
1
Added to Database
2026-01-24