Search results

This chapter analyzes the effects of introducing a graduated minimum wage in a model with optimal income taxation in which a government seeks to maximize social welfare. It shows that the optimal graduated minimum wage increases social welfare by increasing the low-productivity workers’ consumption and bringing it closer to the first-best. The chapter also describes how the graduated minimum wage in a social welfare optimum depends on important economy characteristics such as the government’s revenue needs, the social welfare weight of low-productivity workers, and the numbers and productivities of the different types of workers.

The purpose of this study to improve the efficiency of customer acquisition and retention through the design of salary information disclosure mechanism.

This study develops a stylized game-theoretic model of delegating customer acquisition and retention, focusing on how firms choose delegation and wage information disclosure strategy.

The results confirm the necessity for enterprises to disclose salary information. When sales agents are risk neutral, firms should choose multi-agent (MA) delegation and disclose their wages. However, when agents are risk averse, firms may disclose the wages of acquisition agents or both agents in MA delegation, depending on the uncertainty of the retention market.

This paper contributes to the literature on delegation of customer acquisition and retention and demonstrates that salary disclosure can be used as a supplement to the incentive mechanism.

This chapter introduces a model of efficiency-wage competition along the lines put forward by Hahn (1987). Specifically, I analyze a two-firm economy in which employers screen their workforce by means of increasing wage offers competing one another for high-quality employees. The main results are the following. First, using a specification of effort such that the problem of firms is well-behaved, optimal wage offers are strategic complements. Second, the symmetric Nash equilibrium can be locally stable under the assumption that firms adjust their wage offers in the direction of increasing profits by conjecturing that any wage offer above (below) equilibrium will lead competitors to underbid (overbid) such an offer. Finally, the exploration of possible labor market equilibria reveals that effort is counter-cyclical.

This paper examines the connection between illegal migration, minimum wages, and enforcement policy. We first explore the employers’ decision regarding the employment of illegal migrants in the presence of an effective minimum wage. We show that the employers’ decision depends on the wage gap between those of the legal and illegal workers and on the penalty for employing illegal workers. We consider the effects a change in the minimum wage has on the employment of illegal immigrants and local workers. We conclude by considering the optimal migration policy taking into consideration social welfare issues.

The purpose of this paper is to analyze and solve the problem of moral hazard in firms because of asymmetry information between firms and workers and to contract upon the workers' shiftless actions.

Based on principle‐agent theory and human resource management practice, an optimal dynamic wage contract model is designed. By applying simulation technology, the dynamic wage contract model is compared to the general static wage contract model and the affects made by the optimal dynamic wage contract to workers and firms are analyzed.

According to the consequences of simulation, the dynamic wage contract has better characteristics and is more practical than the static one. In the dynamic wage contract, the current action of a worker has a persistent effect on the future outcome. It is proved that the dynamic wage contract is optimal to the firm. The optimal dynamic wage contract is renegation‐proofness. It not only can incentive workers to work hard and help the firm achieve Pareto efficiency, but also can smooth the firm's incentive costs and reduce the risk born by workers.

The paper provides some reasonable conclusions for the human resource management in firms.

Attribution bias can be costly to firms because it hinders decision makers’ ability to infer the real cause of prior events and take corrective action to improve future performance. This study extends prior research by examining whether and how the presence of variance reporting from accounting systems affects firm profitability through a labor cost management decision that is highly susceptible to attribution bias. Our results support the prediction that the presence of variance reporting (process feedback) increases the likelihood of belief revision and corrective action related to the systematic error, and thus increases overall profitability for the firm. The findings of our study propose a solution to attribution and learning problems observed when decision makers are responsible for both cost management and bids as documented in prior literature.

Using an extensive data set on Finnish workers during the years 1990–2002, we analyze the relation between dispersion of wages within plants and labor productivity. We find a positive and significant relation between dispersion of wages within plant and average sales per worker. This relation is quadratic when dispersion is conditioned on workers’ observable characteristics. We also find positive and significant relation between unconditional dispersion of wages within plant and value added per hours worked, while we find a non-significant relation between conditional wage dispersion and valued added per hours worked. Results indicate that the incentive effect of wage dispersion dominates fairness or sabotage considerations.

Using recent literature, examines developments in seven macroeconomic schools of thought: orthodox Keynesian, monetarist, new classical, real business cycle theory, new Keynesian, Austrian and post‐Keynesian. Describes all of these and classifies them as orthodox, new or radical. After setting out the differences, discusses the degree of agreement between the schools of thought. Concludes that macroeconomics is constantly evolving, resulting in new disagreements requiring a new consensus.

The aim of this paper is to address a local separability character partly identified by non‐farm participation behaviors in the context of multiple market imperfections.

The paper develops a model to analyze agricultural household's non‐farm participation based on heterogeneous asset endowments. The model is applied to recent data from Zhouzhi, a mountainous county in rural western China.

The paper shows that human capital, social capital and other capital assets have significant but different effects on the agricultural household's participation in non‐farm activities, and they help to break down non‐farm labor constraints. Nonseparability holds only for those households unable to participate in non‐farm activities due to poor asset endowments.

The agricultural household model developed in this paper and its application in China provide insights into theory and empirical analysis of agricultural households' behavior and rural development.