This essay is a discussion of how economists are attempting to understand institutions within the organizations of the labor market. The institutions and issues discussed include mandatory retirement; discontinuous jumps in wages; pay compression; rights of tenure; up-or-out hierarchies; timing...

Personnel economics drills deeply into the firm to study human resource management practices like compensation, hiring practices, training, and teamwork. Why should pay vary across workers within firms -- and how "compressed" should pay be within firms? Should firms pay workers for their...