The Peter Principle states that, after a promotion, the observed output of promotedemployees tends to fall. Lazear (2004) models this principle as resulting from a regression tothe mean of the transitory component of ability...

Why do some leaders succeed while others fail? This question is important, but its complexitymakes it hard to study systematically. We examine an industry in which there are welldefinedobjectives, small teams, and exact measures of leaders’ characteristics. We showthat a strong predictor of a...

Although an inverse relationship between sickness absence and unemployment has beendocumented in a number of studies using either quarterly or annual data from differentcountries with varying institutional frameworks, it is not yet clear whether this empiricalregularity is due to changes in the...

On theoretical grounds, monitoring of top executives by the (supervisory) board is expectedto be value relevant. The empirical evidence is ambiguous and we analyze three noncompetingexplanations for this ambiguity: (i) The positive effect on firm value of boardmonitoring is hidden in stock price...

Using microdata, we analyse the determinants of firm relocation and outsourcing decisionsand their effects on firms´ employment decisions. The results for a sample of 32 countriesshow that both strategies have been more intense in the EU-15 countries than in the rest andthat, in some cases,...

This paper analyzes data from a novel field experiment designed to test the impact of twodifferent insurance products and a secret saving device on solidarity in risk-sharing groupsamong rural villagers in the Philippines. Risk is simulated by a lottery. Risk-sharing ispossible in solidarity...

There is a longstanding concern that material incentives might undermine prosocial motivation, leading to a decrease in blood donations rather than an increase. This paper provides an empirical test of how material incentives affect blood donations in a large-scale field experiment spanning...

Many policy makers and economists argue that financial literacy is key to financial well-being. But why do many individuals remain financially illiterate despite the apparent importance of being financially informed? This paper presents results of a field study linking individual decisions to...

Fungibility of money is a central principle in economics. It implies that any unit of money is substitutable for another and that the composition of income is irrelevant for consumption. We find in a field experiment that even in a simple, incentivized setup many subjects do not treat money as...

Carefully-matched pairs of written job applications were made to test for age discrimination inhiring. A twenty-one year-old and a thirty-nine year-old woman applied for jobs where a newgraduate was sought; men aged twenty-seven and forty-seven, inquired about employmentas waiters; women aged...