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In this chapter we study job design. Do organizations plan precisely how the job is to be done ex ante, or ask workers to determine the process as they go? We first model this decision and predict complementarity among these following job attributes: multitasking, discretion, skills, and interdependence of tasks. We argue that characteristics of the firm and industry (e.g., product and technology, organizational change) can explain observed patterns and trends in job design. We then use novel data on these job attributes to examine these issues. As predicted, job designs tend to be “coherent” across these attributes within the same job. Job designs also tend to follow similar patterns across jobs in the same firm, and especially in the same establishment: when one job is optimized ex ante, others are more likely to be also. There is evidence that firms segregate different types of job designs across different establishments. At the industry level, both computer usage and R&D spending are related to job design decisions.

Early models of the functional distribution of income assume constant labor productivity among all individuals. Not until human capital theory developed did scholars take into account how productivity varied across workers. According to early human capital models, this variation came about because each individual invested differently in education and training. Those acquiring greater amounts of schooling and on-the-job training earned more. However, these models neglected why one person would get training while another would not. One explanation is individual heterogeneity. Some individuals are smarter, some seek risk, some have time preferences for the future over the present, some simply are lucky by being in the right place at the right time, and some are motivated by the pay incentives of the jobs they are in. This volume contains 10 chapters, each dealing with an aspect of earnings. Of these, the first three deal directly with earnings distribution, the next four with job design and remuneration, the next two with discrimination, and the final chapter with wage rigidities in the labor market.