This paper demonstrates that large firms prefer to hire younger workers, which is implied by the firm-specific human capital investment theory. A simple model consistent with the implication is proposed to study large firms' hiring decisions and compensation structures. The main predictions of...

I present a model in which (1) a more talent-demanding task increases both rewards for high talent and the penalty for low talent due to a greater fixed cost of production, and (2) individual talent is task-specific and talent updates occur only for tasks near the attempted task, which implies a...

We show that long-term compensation is associated with higher pay in the financial industry and the legal sector. Then, using a detailed survey of law school graduates, we explore why firms use long-term compensation. We find that individuals with jobs that make them highly visible and that...