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We show that the severance pay scheme can serve as bond and improve the welfare. When the authority appropriately adjudges the worker's effort, the increase in a severance payment reduces the shirker''s expected benefit, so that the severance pay works as a bond, which is warranted by the authority.
Persistent link: https://www.econbiz.de/10005094684
We show that the severance pay scheme can serve as bond and improve the welfare. When the authority appropriately adjudges the worker's effort, the increase in a severance payment reduces the shirker''s expected benefit, so that the severance pay works as a bond, which is warranted by the authority.
Persistent link: https://www.econbiz.de/10010630147
The implications of on-the-job search and learning-by-doing of young workers are studied in a search-matching model. The labor market is segmented in two sub-markets: that of beginners, and that of experienced workers offering higher wages. After a long enough employment spell, beginners can...
Persistent link: https://www.econbiz.de/10011278592
This paper presents a simple model to characterize the discriminatory behavior of a non-complying firm in a minimum-wage economy. In the analysis, the violating firm pays one “favored†group of workers the statutory minimum and the other “non-favored†group of workers a...
Persistent link: https://www.econbiz.de/10005416833
Individuals wishing to get married have made increasing use of matchmakers. This notwithstanding, economists have paid scant attention to the strategies employed by matchmakers and to the likelihood of success arising from the use of these strategies. Consequently, we first specify a...
Persistent link: https://www.econbiz.de/10005416945
This note considers the provision of incentives in public organizations that face the following three constraints. First, no lateral entry is possible. Second, the outside opportunities of bureaucrats are independent of their performance. Third, the organization cannot design incentive schemes...
Persistent link: https://www.econbiz.de/10005416951
The labor market is introduced into the standard vertical differentiation model, linking increasingly the quality of the product and the effort necessary for workers to produce it. Surprisingly, when two firms compete on the product market but are monopolies on the labor market, at equilibrium...
Persistent link: https://www.econbiz.de/10011207122
Individuals wishing to get married have made increasing use of matchmakers. This notwithstanding, economists have paid scant attention to the strategies employed by matchmakers and to the likelihood of success arising from the use of these strategies. Consequently, we first specify a “local”...
Persistent link: https://www.econbiz.de/10011039070
While a number of papers have addressed the costs and benefits of conscription, only one paper - Warner and Negrussa (2005) - considers the social welfare costs that result from efforts to illegally evade the draft. In this note, we address legal draft evasion - in particular, the use by of...
Persistent link: https://www.econbiz.de/10010741268
This note considers the provision of incentives in public organizations that face the following three constraints. First, no lateral entry is possible. Second, the outside opportunities of bureaucrats are independent of their performance. Third, the organization cannot design incentive schemes...
Persistent link: https://www.econbiz.de/10010836056