This paper examines the relationship between firms? wage offers and workers? supply of effort using a three-period experiment. In equilibrium, firms will offer deferred compensation: first period productivity is positive and wages are zero, while third period productivity is zero and wages are...

It is frequently argued that pure government-mandated severance transfers by the employer to the worker have neither employment nor welfare effect because they can be offset by private transfers from the worker to the employer. In this paper, using a dynamic search and matching model a la...

Consider a labour market with heterogeneous workers. Firms recruit workers by fixing a hiring standard and a wage offer simultaneously. A more demanding hiring standard necessitates a better wage offer in order to attract enough qualified applicants. As a result, an efficiency wage effect is...

In 1958 Jacob Mincer pioneered an important approach to understand earnings distribution. In the years since Mincer?s seminal work, he as well as his students and colleagues extended the original human capital model, reaching important conclusions about a whole array of observations pertaining...

The aim of this study is to evaluate employees' productivity in relation to their contract status. This study uses (a) survey data collected among manufacturing sector firms, having more than 15 employees, in Cameroon between April and May 2006 and (b) information issued by the National...

The career prospects of newly recruited employees differ substantially within an organization. The stars experience a considerable growth in earnings; others can hardly maintain their entry salaries. This article sheds light on the mechanisms generating the observed heterogeneity in earnings...

We devise an experiment to explore the effect of different degrees of competition on optimal contracts in a hidden-information context. In our benchmark case, each principal is matched with one agent of unknown type. In our second treatment, a principal can select one of three agents, while in a...

Monitoring by peers is often an effective means of attenuating incentive problems. Most explanations of the efficacy of mutual monitoring rely either on small group size or on a version of the Folk theorem with repeated interactions which requires reasonably accurate public information...

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,...