In an efficiency wage economy, lump-sum severance pay from which shirkers can be excluded raises employment. However, severance payments are usually related to wages. It is shown that earnings-related, mandated severance pay will have ambiguous employment effects if effort can be varied...

Decisions by firms and individuals on the extent of their tax payments have generally been treated as separate choices. Empirically, a positive relationship between corporate and personal income tax evasion can be observed. The theoretical analysis in this paper shows that a manager's decision...

In this paper we consider the interaction between local workers and migrants in the production process of a firm. Both local workers and migrants can invest effort in assimilation activities in order to increase the assimilation of the migrants into the firm and thereby increase their...