We analyze the welfare and employment effects of different wage bargaining regimes. Within the large firm search model, we show that collective bargaining affects employment via two channels. Collective bargaining exerts opposing effects on job creation and wage setting. Firms have a stronger...

Conventional theory predicts that productivity gains lead to hikes in real pay. Efficiency wage theory hypothesizes that pay increases can lead to productivity improvements. But would such results be observed in a corporatist economy with centralized bargaining? For the case of Austria, a...

This paper explores the consequences of sabotage for the design of incentive contracts. The possibility of sabotage gives rise to a dynamic concern, similar to the Ratchet effect, which distorts the agents' incentives. We first show that the mere possibility of sabotage may make it impossible to...

This paper attempts to test the morale theory of nominal wage rigidity by identifying the causal elect of pay cuts on workers' income satisfaction and work morale. This paper uses the current deflationary recession in Japan to estimate this causal elect. Our original survey of Japanese firms and...

While much research has focused on the effects of ethical and unethical leadership, little is known about how followers come to perceive their leaders as ethical or unethical. In this article, we investigate the co-creation of ethical and unethical leadership perceptions. Specifically, we draw...

At the close of the twentieth century, sweatshops remain an integral part of the world economic order. Most sweatshops are in developing countries where governments implicitly sanction them as an instrument of economic development. Multinational corporations and other advanced economy suppliers...

This paper studies the link between hourly wages and workers' subjective assessments of how easy it would be to find another job as good as the present one, and how easy it would be for an employer to replace an employee. First, using high-quality data, I study the correlates of these two...