This paper studies the design of optimal contracts in dynamic environments where agents learn by doing. We derive a condition under which contracts are fully incentive compatible. A closed-form solution is obtained when agents have CARA utility. It shows that human capital accumulation...

Several studies have shown that employees with temporary contracts have lower training participation than those with permanent contracts. There is, however, no empirical literature on the difference in informal learning on the job between permanent and temporary workers. In this paper, we...

The level of Chief Executive Officer (CEO) pay responds asymmetrically to good and bad news about the CEO's ability. The average CEO captures approximately half of the surpluses from good news, implying CEOs and shareholders have roughly equal bargaining power. In contrast, the average CEO bears...

This paper develops an equilibrium job search model in which the employed worker privately accumulates human capital and continually searches for a better paying job. Firms encourage production and discourage turnover by rewarding with bonus payments and long service allowances, respectively,...

The social and the private returns to education differ when education can increase productivity, and also be used to signal productivity. We show how instrumental variables can be used to separately identify and estimate the social and private returns to education within the employer learning...

The social and the private returns to education differ when education can increase productivity, and also be used to signal productivity. We show how instrumental variables can be used to separately identify and estimate the social and private returns to education within the employer learning...

The empirical literature on employer learning assumes that employers learn about unobserved ability differences across workers as they spend time in the labor market. This article describes testable implications that arise from this basic hypothesis and how they have been used to quantify the...

The empirical literature on employer learning assumes that employers learn about unobserved ability differences across workers as they spend time in the labor market. This article describes testable implications that arise from this basic hypothesis and how they have been used to quantify the...

A pre-condition for employer learning is that signals at labor market entry do not fully reveal graduates' productivity. I model various distinct sources of signal imperfection - such as noise and multi-dimensional types - and characterize their implications for the private return to skill...

A pre-condition for employer learning is that signals at labor market entry do not fully reveal graduates' productivity. I model various distinct sources of signal imperfection-such as noise and multi-dimensional types-and characterize their implications for the private return to skill...