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Wages, Hours and Human Capital Over the Life Cycle

Author

Listed:
  • Hart Robert A.

    (Department of Economics, University of Stirling, Scotland, FK9 4LA)

  • Ma Yue

    (Department of Economics, Lingnan University, Hong Kong, China. Phone: +8 52-2616-72 0)

Abstract

We investigate wage-hours contracts within a four-period rent sharing model that incorporates asymmetric information. Distinctions are made among (a) an investment period, (b) a period in which the parties may separate (quits or layoffs) or continue rent accumulation and sharing, (c) a post investment period and, (d) retirement. We establish that increases in both wage rates and hours of work in the post-investment period serve to minimise sub-optimal separations and, moreover that both wage and hours schedules are concave. Testing is based on 13 waves of British Household Panel Survey from 1991 to 2003.

Suggested Citation

  • Hart Robert A. & Ma Yue, 2008. "Wages, Hours and Human Capital Over the Life Cycle," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 228(5-6), pages 446-464, October.
    • Handle: RePEc:jns:jbstat:v:228:y:2008:i:5-6:p:446-464
    DOI: 10.1515/jbnst-2008-5-604
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    References listed on IDEAS

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    More about this item

    Keywords

    Wage-hours contracts; asymmetric information; four period model;
    All these keywords.

    JEL classification:

    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

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