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Screening, Competition, and Job Design: Economic Origins of Good Jobs

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  • Bjorn Bartling
  • Ernst Fehr
  • Klaus M. Schmidt

Abstract

High-performance work systems give workers more discretion, thereby increasing effort productivity but also shirking opportunities. We show experimentally that screening for work attitude and labor market competition are causal determinants of the viability of high-performance work systems, and we identify the complementarities between discretion, rent-sharing, and screening that render them profitable. Two fundamentally distinct job designs emerge endogenously in our experiments: "bad" jobs with low discretion, low wages, and little rent-sharing, and "good" jobs with high discretion, high wages, and substantial rent-sharing. Good jobs are profitable only if employees can be screened, and labor market competition fosters their dissemination. (JEL D12, D82, J24, J31, J41, M12, M54)

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Bibliographic Info

Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 102 (2012)
Issue (Month): 2 (April)
Pages: 834-64

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Handle: RePEc:aea:aecrev:v:102:y:2012:i:2:p:834-64

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References

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Citations

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Cited by:
  1. Florian Englmaier & Stephen G. Leider, 2012. "Managerial Payoff and Gift Exchange in the Field," CESifo Working Paper Series 3707, CESifo Group Munich.
  2. Cottini, Elena & Kato, Takao & Westergård-Nielsen, Niels C., 2009. "Adverse Workplace Conditions, High-Involvement Work Practices and Labor Turnover: Evidence from Danish Linked Employer-Employee Data," IZA Discussion Papers 4587, Institute for the Study of Labor (IZA).
  3. Florian Englmaier & Sebastian Strasser & Joachim Winter, 2011. "Worker Characteristics and Wage Differentials: Evidence from a Gift-Exchange Experiment," CESifo Working Paper Series 3637, CESifo Group Munich.
  4. Matteo Ploner & Katrin Schmelz & Anthony Ziegelmeyer, 2010. "Hidden Costs of Control: Three Repetitions and an Extension," Jena Economic Research Papers 2010-007, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  5. Ermanno Celeste Tortia, 2013. "Employer moral hazard and wage rigidity. The case of worker-owned and investor-owned firms," Econometica Working Papers wp46, Econometica.
  6. Jared Rubin & Roman Sheremeta, 2012. "Principal-Agent Settings with Random Shocks," Working Papers 12-21, Chapman University, Economic Science Institute.
  7. Benndorf, Volker & Rau, Holger A., 2012. "Competition in the workplace: An experimental investigation," DICE Discussion Papers 53, Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
  8. Navarra, Cecilia & Tortia, Ermanno, 2013. "Employer moral hazard, wage rigidity and worker cooperatives: A theoretical appraisal," AICCON Working Papers 117-2013, Associazione Italiana per la Cultura della Cooperazione e del Non Profit.

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