Wage-Employment Contracts Export

@article{citeulike:1025486, abstract = {This paper studies the efficient agreements about the dependence of workers' earnings on employment, when the employment level is controlled by firms. The firms superior information about profitability conditions is responsible for this form of contract governance. Under plausible assumptions, such agreements will cause employment to diverge from efficiency as a byproduct of their attempt to mitigate risk. It is shown that, if leisure is a normal good and firms are risk-neutral, employment is always above the efficient level. Such a one-period implicit contracting model cannot, therefore, be used to \"explain\" unemployment as a rational byproduct of risk sharing between workers and a risk-neutral firm under conditions of asymmetric information.}, author = {Green, Jerry and Kahn, Charles M.}, citeulike-article-id = {1025486}, citeulike-linkout-0 = {http://www.jstor.org/stable/1885379}, keywords = {411-2, contracts}, posted-at = {2007-01-04 21:43:05}, priority = {2}, title = {Wage-Employment Contracts}, url = {http://www.jstor.org/stable/1885379} }

TY - JOUR ID - citeulike:1025486 L3 - citeulike-article-id:1025486 N2 - This paper studies the efficient agreements about the dependence of workers' earnings on employment, when the employment level is controlled by firms. The firms superior information about profitability conditions is responsible for this form of contract governance. Under plausible assumptions, such agreements will cause employment to diverge from efficiency as a byproduct of their attempt to mitigate risk. It is shown that, if leisure is a normal good and firms are risk-neutral, employment is always above the efficient level. Such a one-period implicit contracting model cannot, therefore, be used to "explain" unemployment as a rational byproduct of risk sharing between workers and a risk-neutral firm under conditions of asymmetric information. TI - Wage-Employment Contracts KW - 411-2 KW - contracts AU - Green, Jerry AU - Kahn, Charles UR - http://www.jstor.org/stable/1885379 ER -