This chapter reviews the literature on employment and labor law. The goal of the review is tounderstand why every jurisdiction in the world has extensive employment law, particularlyemployment protection law, while most economic analysis of the law suggests that lessemployment protection would...

In this lecture I first give an explanation for invidious preferences based on the (evolutionary) competition for resources. Then I show that these preferences have wide ranging and empirically relevant effects on labor markets, such as: workplace skill segregation, gradual promotions, wage...

This chapter reviews the literature on employment and labor law. The goal of the review is to understand why every jurisdiction in the world has extensive employment law, particularly employment protection law, while most economic analysis of the law suggests that less employment protection...

This paper considers a real business cycle model with labor search frictions where two types of incentive pay are explicitly introduced following the insights from the micro literature on performance pay (e.g. Lazear, 1986). While in both schemes workers and firms negotiate ahead of time-t...

This chapter reviews the literature on employment and labor law. The goal of the review is to understand why every jurisdiction in the world has extensive employment law, particularly employment protection law, while most economic analysis of the law suggests that less employment protection...

We analyze the impact of social comparison on optimal contract design under imperfect labor market competition for managerial talent. Adding a disutility of social comparison as induced by a ranking of verifiable efforts to the multi-task model by Bénabou and Tirole (2016), we demonstrate that...

This paper studies the role of match quality for contractual arrangements, wage dynamics and workers' retention. We develop a model in which profit maximizing firms offer a performance-based pay arrangement to retain workers with relatively high match-specific productivity. The key implications...

This paper develops a dynamic general equilibrium dual labour market model which incorporates both efficiency wages and union bargaining with monopolistically competitive firms. In one sector, a traditional sector produces a homogeneous good and firms face perfect competition on the product...

Empirical evidence suggests that networks of personal relations are important in the micro dynamics of labor markets: even in modern capitalistic economies a high share of jobs are filled by social referrals. This paper aims at shedding light on an apparent puzzle concerning the relationship...

When workers are faced with the threat of unemployment, their relationship with a particular firm becomes valuable. As a result, a worker may comply with the terms of a relational contract that demands high effort even when performance is not enforceable by a third party. But can relational...