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Delayed Payment Contracts and a Firm's Propensity to Hire Older Workers

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Author Info
Hutchens, Robert
Abstract

There are jobs for which firms employ older workers but tend not to hire new older workers. This may be attributable in part to implicit con tracts that discourage worker shirking and malfeasance by shifting compensation to the end of the contract. Such "delayed payment" contracts can introduce a form of fixed costs into the employment relationship. Much as with hiring and training costs, these fixed costs lead firms to hire primarily young (long-term) wo rkers. While firms employ older workers-workers who are serving out the last years of their contract-they tend not to hire them. This paper presents empirical evidence that is consistent with this argument. Copyright 1986 by University of Chicago Press.

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Publisher Info
Article provided by University of Chicago Press in its journal Journal of Labor Economics.

Volume (Year): 4 (1986)
Issue (Month): 4 (October)
Pages: 439-57
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Handle: RePEc:ucp:jlabec:v:4:y:1986:i:4:p:439-57

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  2. Bhattacharya, Joydeep & Reed, Robert, 2006. "Social Security and Intergenerational Redistribution," Staff General Research Papers 12661, Iowa State University, Department of Economics. [Downloadable!]
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  5. Flinn, Christopher J., 1988. "The Effect Of Employee Heterogeneity On Firm Profits And Contract Compliance," Working Papers 88-27, C.V. Starr Center for Applied Economics, New York University. [Downloadable!]
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  7. Pfeifer, Christian, 2009. "An Intra-Firm Perspective on Wage Profiles and Employment of Older Workers with Special Reference to Human Capital and Deferred Compensation," Diskussionspapiere der Wirtschaftswissenschaftlichen Fakultät der Universität Hannover dp-413, Universität Hannover, Wirtschaftswissenschaftliche Fakultät. [Downloadable!]
  8. Harvey S. James & Derek M. Johnson, 2000. "Just-cause provisions, severance pay, and the efficiency wage hypothesis," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 21(2), pages 83-88.
  9. George A. Akerlof & Lawrence F. Katz, 1989. "Workers' Trust Funds and the Logic of Wage Profiles," NBER Working Papers 2548, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  14. Robert Hutchens & Patrick Nolen, 2006. "Will The Real Family-Friendly Employer Please Stand Up: Who Permits Parents To Reduce Working Hours For Purposes of Childcare?," Economics Discussion Papers 622, University of Essex, Department of Economics. [Downloadable!]
  15. George A. Akerlof & Lawrence F. Katz, 1986. "Do Deferred Wages Dominate Involuntary Unemployment as a Worker Discipline Device?," NBER Working Papers 2025, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  17. Alan L. Gustman & F. Thomas Juster, 1995. "Income and Wealth of Older American Households: Modeling Issues for Public Policy Analysis," NBER Working Papers 4996, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  18. Alan L. Gustman & Olivia S. Mitchell & Thomas L. Steinmeier, 1993. "The Role of Pensions in the Labor Market," NBER Working Papers 4295, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  19. Jirjahn, Uwe & Pfeifer, Christian & Tsertsvadze, Georgi, 2006. "Mikroökonomische Beschäftigungseffekte des Hamburger Modells zur Beschäftigungsförderung," IAB Discussion Paper 200625, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
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