Firms commonly use probation to evaluate new hires before making long-term commitments. Workers accepting jobs with a high initial risk of dismissal may expect compensation for this risk. Utilizing an original dataset of Japanese online job ads, this study employs propensity score matching and...

This paper examines the returns to university education in Japan, using tuition, availability of universities, and labor market conditions as instrumental variables. To measure availability of universities, this paper uses total accredited capacity of all universities in the prefecture of...

This paper examines the returns to university education in Japan, using tuition, availability of universities, and labor market conditions as instrumental variables. To measure availability of universities, this paper uses total accredited capacity of all universities in the prefecture of...

This paper proposes an implicit control mechanism of managers inside the firm. We argue that the need to motivate workers may make it beneficial for a self-interested, short-sighted manager to pursue long-run viability of the firm. When the firm is in a stable environment, this implicit control...

This paper explores the consequences of sabotage for the design of incentive contracts. The possibility of sabotage gives rise to a dynamic concern, similar to the Ratchet effect, which distorts the agents' incentives. We first show that the mere possibility of sabotage may make it impossible to...

This paper explores the consequences of sabotage for the design of incentive contracts. The possibility of sabotage gives rise to a dynamic concern, similar to the Ratchet effect, which distorts the agents' incentives. We first show that the mere possibility of sabotage may make it impossible to...

The purpose of this paper is to examine how tasks should be allocated in a simple hierarchy consisting of an organizational designer and subordinates, in the framework of a principal-agent relationship with moral hazard.

An interesting finding in recent research is that strategic considerations and collective bargaining structure often influence foreign direct investment. In this paper, I argue that the support for the decentralisation of collective bargaining may ba an optimal response by unions to the growing...

This paper explores the effects of the 1995 Hanshin-Awaji Earthquake on the wages of people in the area of the earthquake over the 17 years after its occurrence and identified which part of the wage distribution has been most affected by this event by comparing the wage distributions of disaster...

In dynamic principal-agent relationships, it is sometimes observed that the agent's reward depends only on the final outcome. For example, a student's grade in a course quite often depends only on the final exam score, where the performance in the problem sets and the mid-term exam is ignored....