It is a well-known fact that temporary agency workers have to accept high pay penalties. However, remarkably little is known about the remuneration of workers who are frequently employed in this sector or who are employed for a substantial length of time. Based on a rich administrative data set,...

This chapter surveys recent literature on social networks and labour markets, with a specific focus on developing countries. It reviews existing research, in particular, on the use of social networks for hiring and the consequences of networks for on-the-job outcomes, including emerging...

We analyze a long-term contracting problem involving common uncertainty about a parameter capturing the productivity of the relationship, and featuring a hidden action for the agent. We develop an approach that works for any utility function when the parameter and noise are normally distributed...

The Todaro Paradox states that policies aimed at reducing urban unemployment are bound to backfire: they will raise rather than reduce urban unemployment. The aim of this paper is to reexamine this paradox in the context of efficiency wage and search-matching models. For that, we study a policy...

This paper studies the design of optimal contracts in dynamic environments where agents learn by doing. We derive a condition under which contracts are fully incentive compatible. A closed-form solution is obtained when agents have CARA utility. It shows that human capital accumulation...

We propose a spatial search-matching model where both job creation and job destruction are endogenous. Workers are ex ante identical but not ex post since their job can be hit by a technological shock, which decreases their productivity. They reside in a city and commuting to the job center...

Using the 1996-2001 Chilean CASEN Panel Survey, this paper analyzes the impact onincome of the switch from salaried employment to entrepreneurship (self-employment andleadership of micro-enterprises). By means of a difference-in-differences non-parametricmatching estimator the paper alleviates...

Conventional wisdom suggests that an increase in monetary incentives should induce agents to exert higher effort. In this paper, however, we demonstrate that this may not hold in team settings. In the context of sequential team production with positive externalities between agents, incentive...

We present evidence about the role of rent sharing in fostering the interdependence of labour markets around the world. Our results draw on a firm-level panel of more than 2,000 multinationals and more than 5,000 of their affiliates, covering 47 home and host countries. We find considerable...

This paper addresses the applicability of the theory of equalizing differences (Rosen, 1987) in a market in which temporary and permanent workers co-exist. The assumption of perfect competition in the labour market is directly questioned and a model is developed in which the labour market is...