Many firms have wage and layoff policies that are independent of worker-specific traits. Instead, layoff and wage policies depend upon the length of time that a worker has been associated with the firm. In this paper, the author offers a new explanation for this phenomenon based on the fact that...

An at-will employment rule allows parties to sever their employment relationship for "a good reason, a bad reason or no reason at all" (Schawb, S. 1993). A specific performance employment rule allows any party to force the other party to perform as specified in the contract. Although the theory...