Tax Liability Side Equivalence (tax LSE) claims that the statutory incidence of a tax is irrelevant for its economic incidence. In gift-exchange labor markets, firms provide a gift to workers by paying high wages, and workers reciprocate by providing high efforts. Tax LSE is theoretically...

We analyse a model of equilibrium directed search in a large labour market. Each worker, observing the wages posted at all vacancies, makes a fixed, finite number of applications, a. We allow for the possibility of ex post competition should more than one vacancy want to hire the same worker....

Standard economic theory predicts that firms will not invest in general training and will underinvest in specific training. Empirical evidence, however, indicates that firms do invest in general training of their workers. Evidence from laboratory experiments points to less underinvestment in...

Fringe benefits of various kinds have become an essential element of modern labour market mechanisms. Firms offer transport-related fringe benefits such as transport subsidies (company cars, travel and parking subsidies) and relocation subsidies to job applicants. The spatial implications of...

We analyze the implications of multiple applications by job seekers for the microfoundations of the matching function. We emphasize a coordination failure caused by multiple applications, namely, that firms can waste resources processing applicants who are ultimately hired elsewhere.

This paper analyzes empirically the relationship between pay and performance. Economic and psychological theories predict that the design and implementation of a performance measurement and compensation system affect the motivation of employees. Our survey results demonstrate a positive...

One of the main findings of a large body of gift exchange experiments is that in an incomplete contracts environment workers on average do not shirk and usually provide more than the minimum enforceable effort level. In general, 40 to 60 percent of the workers reward higher wages with higher...

Labor market theories allowing for search frictions make marked predictions on the effect of the degree of frictions on wages. Often, the effect is predicted to be negative. Despite the popularity of these theories, this has never been tested. We perform tests with matched worker-firm data. The...

This paper examines the small world hypothesis. The first part of the paper presents empirical evidence on the evolution of a particular world: the world of journal publishing economists during the period 1970-2000. We find that in the 1970's the world of economics was a collection of islands....

This paper studies wage structure characteristics and their incentive effects within one firm. Based on personnel records and an employee survey, we provide evidence that wages are attached to jobs and that promotions play a dominant role as a wage determinant. We furthermore show that a...