New Evidence on Implicit Contracts from Linked Employer-Employee Data
AbstractWe improve the precision of the implicit contract model test proposed by Beaudry and DiNardo (1991) . Our dataset allows us to define the exact industry and plant of a particular employment relationship, link local labor market characteristics to individual-level wages, and control for composition effects. We find evidence in favor of the spot-market model of wage setting in the whole sample, but there is significant variation across industries and education levels. In particular, the spot market matters most for low-skill workers, while the implicit contract model with one-sided limited commitment applies better to high-skill workers. Copyright © The editors of the "Scandinavian Journal of Economics" 2010 .
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Scandinavian Journal of Economics.
Volume (Year): 112 (2010)
Issue (Month): 4 (December)
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Web page: http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1467-9442
Other versions of this item:
- Kilponen, Juha & Santavirta, Torsten, 2010. "New evidence on implicit contracts from linked employer-employee data," Research Discussion Papers 12/2010, Bank of Finland.
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
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- BELLOU Andriana & KAYMAK Baris, 2011.
"Wages, Implicit Contracts, and the Business Cycle: Evidence from a European Panel,"
CEPS/INSTEAD Working Paper Series
- Bellou, Andriana & Kaymak, Barış, 2012. "Wages, implicit contracts, and the business cycle: Evidence from a European panel," Labour Economics, Elsevier, vol. 19(6), pages 898-907.
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