We show in this paper that important insights into the cyclical behaviour of wages can be gained by dividing (real) average hourly earnings into their straight-time hourly wage and overtime components. Our motivation is based on the idea of employment-contingent contracts. BLS published and...

This paper provides a theoretical and empirical analysis of the effect of performance-based layoffs on wage rigidity in the context of performance pay. In the model, it becomes optimal for firms to raise future regular pay to maintain workers' current efforts, which results in downwardly rigid...

We show in this paper that important insights into the cyclical behaviour of wages can be gained by dividing (real) average hourly earnings into their straight-time hourly wage and overtime components. Our motivation is based on the idea of employment-contingent contracts. BLS published and...