How does the environment of an organization influence whether workers voluntarily provide effort? We study the power relationship between a non-profit unit (e.g. university department, NGO, health trust), where workers care about the result of their work, and a bu- reaucrat, who supplies some...

A public service motivation (PSM) inclines employees to provide effort out of concern for the impact of that effort on a valued social service. Though deemed to be important in the literature on public administration, this motivation has not been formally considered by economists. When a PSM...

ERISA preemption of state laws is determined using the following three rules. First, ERISA permits state laws that do not diminish or enhance any of the ERISA basic benefit protections. Second, ERISA preempts any state law that diminishes or enhances any of the three ERISA basic benefit...

The article supplements the two classic legislative histories of ERISA: (1) James A. Wooten, the Employee Retirement Income Security Act of 1974 — A Political History (2004) and (2) Staff of S. Comm. on Labor and Public Welfare, Leg. History of the Employee Retirement Income Security Act of...

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...

Empirical studies of the principal-agent relationship find that extrinsic incentives work in many instances, linking rewards to performance increases effort, but that they can also backfire, reducing effort. Intrinsic motivation, the internal drive to work to master a skill or to improve one's...

Inspired by a recent observation about an online retail company, this paper explains why a firm may find it optimal to offer an exit bonus to recent hires so as to induce self-selection. We study a double adverse selection problem, in which the principal can neither observe agents’ commitment...

I analyze a model in which a principal offers a contract to an agent and can influence the agent’s marginal return of effort by the choice of the project mission. The principal's and the agents' mission preferences are misaligned, and the agents have unobservable intrinsic motivation levels. I...

Are monetary and non-monetary incentives used as substitutes in motivating effort? I address this question in a laboratory experiment in which the choice of the job characteristics (i.e., the mission) is part of the compensation package that principals can use to influence the agents' effort....

This work contributes to the literature demonstrating an important role for psychological traits in labor market decisions. We show that West German workers with an internal locus of control sort into jobs with performance appraisals. Appraisals provide workers who believe they control their...