We introduce dynamic incentive contracts into a model of unemployment dynamics and present three results. First, wage cyclicality from incentives does not dampen unemployment dynamics: the response of unemployment to shocks is first-order equivalent in an economy with flexible incentive pay and...

Theoretical rationales for employer-provided pensions often focus on their ability to increase employee effort and selectively retain quality workers. We test these hypotheses using rich administrative data on public school teachers around the pension-eligibility threshold. When teachers cross...

To increase a company's earnings, a project must generate enough income next year to pay for its own financing. Hence, a manager who wants to maximize her EPS (earnings per share) should only invest in accretive projects that have income yields above the firm's cheapest financing option. This is...

Most S&P 500 corporations disclose that their profits depend on non-wage competition for worker talent via workplace amenities like work-life balance. We quantify this dependence using a labor market matching model with endogenous amenities. When productive (unproductive) firms provide the...

This chapter reviews the analysis of non-wage amenities in the workplace. The competitive model is the point of departure, but the emphasis is on models of imperfect competition that have greater empirical relevance. In addition to the traditional hedonic model for estimating preferences over...

We examine the labor supply decisions of substitute teachers - a large, on-demand market with broad shortages and inequitable supply. In 2018, Chicago Public Schools implemented a targeted bonus program designed to reduce unfilled teacher absences in largely segregated Black schools with...

We present a mechanism based on managerial incentives through which common ownership affects product market outcomes. Firm-level variation in common ownership causes variation in managerial incentives and productivity across firms, which leads to intra-industry and intra-firm cross-market...

Team incentives are important in many compensation systems that pay workers according to the output of their team as well as to their own output, with team bonuses often depending on whether the team meets or exceeds specified thresholds. Yet little is known about how team members with different...

Performance pay in general amounts to only a small fraction of total pay. In this paper, we show that performance pay is nevertheless important for the level and dynamics of wages over the life cycle because of the incentives it indirectly provides for human capital acquisition and because of...

Economic theory and empirical studies conclude that the cost of voluntary employer-sponsored health insurance falls on employees. However, the distribution of incidence and the mechanism through which incidence occurs have not been well-established. We provide new evidence about incidence by...