The Theory of Internal Wage and Employment Structure

This article examines the behavior of a competitive firm in a world in which workers gradually acquire skill and experience. It is shown that the firm will not pay workers--who are indexed in this model by seniority--the value of their marginal product. The article also proposes a simple incentive argument as a possible explanation for the fact that many firms seem to pay wages based upon age and length of service.

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Year of publication:	1981
Authors:	Oswald, Andrew J.
Published in:	Bell Journal of Economics. - The RAND Corporation, ISSN 0361-915X. - Vol. 12.1981, 1, p. 263-271
Publisher:	The RAND Corporation

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Extent:	application/pdf
Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005551048