Work Effort and Contract Length
AbstractContracts of deterministic duration are derived as solutions to a moral hazard problem in a framework that extends E. Fama's (1980) single-period labor contracts model by introducing recontracting costs and long-term contracts. A worker can be induced to put forth unobservable effort if he knows that his wages in future contracts will be related to his past overall productivity. As contract length is increased, the worker is more likely to shirk because the present value of future wage revisions associated with shirking is reduced. The optimal contract length minimizes the sum of explicit contracting costs and the costs of shirking. Copyright 1988 by The London School of Economics and Political Science.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by London School of Economics and Political Science in its journal Economica.
Volume (Year): 55 (1988)
Issue (Month): 219 (August)
Contact details of provider:
Postal: Houghton Street, London WC2A 2AE
Phone: +44 (020) 7405 7686
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0013-0427
More information through EDIRC
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Protopopescu Dan, 2008. "Improving the Effort Concept: A Revision of the Traditional Approach in the Context of Controlled Dynamic Stochastic Environments," UFAE and IAE Working Papers 739.08, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC), revised 03 Dec 2009.
- Mohamed Ben Halima & Bassem Ben Halima, 2008. "Determinants for Labour Contract Length: A French Microeconometric Study," Post-Print halshs-00365976, HAL.
- Mark Frascatore, 1997. "Staggered contracts and profitable entry deterrence: an application to professional sports," Journal of Economics, Springer, vol. 66(1), pages 71-86, February.
- Mohamed Ali Ben Halima, 2005.
"The determinants for labour contract length A French micro-econometric study,"
0503, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure.
- Mohamed Ben Halima, 2005. "The determinants for labour contract length A French micro-econometric study," Post-Print halshs-00180067, HAL.
- Ferdinando Colombo & Guido Merzoni, 2008. "For how long to tie your hands? Stable relationships in an unstable environment," Journal of Economics, Springer, vol. 95(2), pages 93-120, November.
- Aizenman, Joshua & Hausmann, Ricardo, 2000.
"The impact of inflation on budgetary discipline,"
Journal of Development Economics,
Elsevier, vol. 63(2), pages 425-449, December.
- Danziger, Leif, 1995. "Discrete shocks and fixed duration of labor contracts," Labour Economics, Elsevier, vol. 2(4), pages 359-379, December.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.