This article utilizes a rich data set on workers and their employers in the United States and Japan to test several predictions of human capital theory. The data set incorporates both prospective and retrospective measures of turnover, includes multiple measures of training, and provides a basis...

The free market may not lead to the efficient level of just-cause employment protection if workers are heterogeneous. Any firm that switches to just cause will attract a disproportionate share of workers that provide low effort, yet are difficult to dismiss with cause. Thus, there is an...

The authors study repeated games in which players observe a public outcome that imperfectly signals the actions played. They provide conditions guaranteeing that any feasible, individually rational payoff vector of the stage game can arise as a perfect equilibrium of the repeated game with...

Efficiency wage theories predict that companies that pay high wages will have higher productivity from high work effort, low turnover, and other efficiency-enhancing effects. This paper uses the PIMS line-of-business data set to test whether high wage businesses are more productive. Relative...

This paper examines a unique data set based on surveys of 139 compensation executives. Respondents read scenarios describing a hypothetical company and its labor market, and recommended wage changes for several positions. Contrary to some popular theories, differences in unemployment, quit...

This article presents tests of rational expectations using the Profit Impact of Market Strategy survey of executives of large corporations. Unlike past surveys, the respondents have a financial interest in being accurate. Executives do not have rational expectations concerning output prices,...