Human capital and deferred compensation might explain why firms employ but do not hire older workers. Adjustments of wage-tenure profiles for older new entrants are explored in the context of deferred compensation. From an equity theory perspective, such adjustments might lead to adverse...

Using a unique dataset of establishments in Germany surveyed during the Covid-19 pandemic, this study investigates whether personnel adjustments during the crisis differed between establishments with and without a works council. Our regression analyses show that the hiring and dismissal rate as...

Employees often learn about their ability while working, and the resulting beliefs interact with pay incentives to shape employment outcomes. This paper investigates this issue within a model that incorporates learning about ability on the job, dynamic selection, effort, and variation in pay...

Much of the empirical literature on PRP (Performance Related Pay) focuses on a question of whether the firm can increase firm performance in general and enterprise productivity in particular by introducing PRP and if so, how much. However, not all PRP programs are created equal and PRP programs...

The paper provides empirical evidence how promotion incentives and performance pay are related to nonverifiable human capital acquisition contingent on its grade of firm specificity. Consistent with Prendergast (1993), I document that promotion incentives are positively related to nonverifiable...

Using German establishment data, we show that the relationship between intensity of performance pay and intensity of applicant screening depends on the nature of production. In establishments with increased multitasking, performance pay is positively associated with applicant screening. By...

Theory predicts that the wage effects of government-mandated severance payments depend on workers' and firms' relative bargaining power. This paper estimates the effect of employment protection legislation (EPL) on workers' individual wages in a quasi-experimental setting, exploiting a reform...