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The efficiency wage model is an important concept in labor economics and development economics that explains why firms may pay wages above the market-clearing level to increase worker productivity. The central premise is that higher wages can enhance worker effort, reduce shirking, lower turnover, improve morale, and attract higher-quality labor. Unlike the traditional neo-classical assumption where wages adjust to clear the labor market, efficiency wages can lead to involuntary unemployment because firms deliberately pay more than the equilibrium wage. Key results of the efficiency wage model include the positive relationship between wages and worker effort. This relationship is often represented as an effort function, $E = E(W)$, where $E$ is effort and $W$ is the wage paid. Effort is assumed ________ _______ ____ ______ ______ ____ _________ __________ _____ ________.
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