In any hedonic system in which consumers purchase a characteristic embodied in a good, consumers with strong tastes for the characteristic are matched with producers with low costs of producing it. This paper demonstrates that, as a result of this matching process, the "exogenous" variables in...

Most models of implicit lifetime contracts imply that at any particular point in time, workers' wages and value of marginal product (VMP) will diverge. As a result, the contract will have to specify hours as well as wages, since firms will desire to prevent workers from working more when the...

Almost all labor supply models are estimated under the assumption that workers are free to choose their hours. However, theory, casual empiricism and survey data suggest that many workers are not free to vary the hours within a job. Consequently, labor supply estimates based on actual hours of...

Lifetime contracts imply that at a given time, wages and value of marginal product (VMP) will diverge. The contract will specify hours as well as wages, since firms will desire to prevent workers from working more when the wage is greater than VMP and from working less when the wage is less than...

Almost all labor-supply models are estimated under the assumption that workers are free to choose their hours. However, theory, casual empiricism, and survey data suggest that many workers are not free to vary the hours within a job. Consequently, labor-supply estimates based on actual hours of...

Efficiency wage models, in which firms find it profitable to pay wages above workers' reservation wages, provide a promising explanation for unemployment and interindustry wage differentials. One criticism of such models is that they imply firms should sell jobs by requiring up-front bonds from...

Occupational safety levels in nonunion firms are empirically shown to reflect only the preferences of workers with zero to three years job tenure. Therefore, ex post, the market is inefficient even if workers were optimizing at the time of hire since there are trades possible among workers that...