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Changes in the Employment Contract? Evidence from a Quasi-Experiment

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Author Info
Gary Chaness (University of California, Berkeley)
David Levine (University of California, Berkeley)

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Abstract

Many authors have discussed an apparent shift to a new employment contract characterized by less commitment between employer and employee coupled with closer ties between wages within the enterprise and those in the external labor market. We study the issue of when people in the U.S. and Canada feel pay cuts are fair, comparing our results with those of Kahneman, Knetsch, and Thaler (1986). In contrast to much previous discussion, we find no evidence of increasing acceptance of pay cuts--a measure of whether external, not internal, labor markets are considered fair. These results suggest that new organizational forms might do well to preserve some of the features of the "old" employment contract.

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Paper provided by Institute of Industrial Relations, UC Berkeley in its series Institute for Research on Labor and Employment, Working Paper Series with number 1006.

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Date of creation: 19 Nov 1999
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Handle: RePEc:cdl:indrel:1006

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Frey, Bruno S. & Pommerehne, Werner W., 1993. "On the fairness of pricing -- An empirical survey among the general population," Journal of Economic Behavior & Organization, Elsevier, vol. 20(3), pages 295-307, April. [Downloadable!] (restricted)
  2. MacKenzie, Scott B. & Podsakoff, Philip M. & Fetter, Richard, 1991. "Organizational citizenship behavior and objective productivity as determinants of managerial evaluations of salespersons' performance," Organizational Behavior and Human Decision Processes, Elsevier, vol. 50(1), pages 123-150, October. [Downloadable!] (restricted)
  3. Rebecca M. Blank, 1997. "What Causes Public Assistance Caseloads to Grow?," NBER Working Papers 6343, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  4. George J. Borjas & Richard B. Freeman & Lawrence F. Katz, 1992. "On the Labor Market Effects of Immigration and Trade," NBER Chapters, in: Immigration and the Workforce: Economic Consequences for the United States and Source Areas, pages 213-244 National Bureau of Economic Research, Inc. [Downloadable!]
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  5. David Neumark & Daniel Polsky & Daniel Hansen, 1997. "Has Job Stability Declined Yet? New Evidence for the 1990's," NBER Working Papers 6330, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  6. Levine, David I, 1993. "Fairness, Markets, and Ability to Pay: Evidence from Compensation Executives," American Economic Review, American Economic Association, vol. 83(5), pages 1241-59, December. [Downloadable!] (restricted)
  7. Rabin, Matthew, 1993. "Incorporating Fairness into Game Theory and Economics," American Economic Review, American Economic Association, vol. 83(5), pages 1281-1302, December. [Downloadable!] (restricted)
  8. Piron, Robert & Fernandez, Luis, 1995. "Are fairness constraints on profit-seeking important?," Journal of Economic Psychology, Elsevier, vol. 16(1), pages 73-96, March. [Downloadable!] (restricted)
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  1. Gerlach, Knut & Levine, David & Stephan, Gesine & Struck, Olaf, 2006. "The acceptability of layoffs and pay cuts : comparing North America with Germany," IAB Discussion Paper 200601, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
  2. Gary Charness & David Levine, 2003. "The Road to Hell: An Experimental Study of Intentions," University of California at Santa Barbara, Economics Working Paper Series 14-03, Department of Economics, UC Santa Barbara. [Downloadable!]
  3. Michael Christensen & Thorbjørn Knudsen, 2006. "Evaluation of Uncertain International Markets The Advantage of Flexible Organization Structures," DRUID Working Papers 06-04, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies. [Downloadable!]
  4. Gary Charness & David I. Levine, 1999. "When are Layoffs Acceptable? Evidence from a Quasi-experiment," Economics Working Papers 369, Department of Economics and Business, Universitat Pompeu Fabra. [Downloadable!]
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  5. Christian Pfeifer, 2007. "The Perceived Fairness of Layoffs in Germany: Participation, Compensation, or Avoidance?," Journal of Business Ethics, Springer, vol. 74(1), pages 25-36, August. [Downloadable!] (restricted)
  6. Sohr, Tatjana, 2005. "Wenn die Karriereleiter wegbricht: Fairness und der Abbau von Hierarchieebenen (When the vareer ladder is removed * fairness and the elimination of hierarchical levels)," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 38(1), pages 68-86. [Downloadable!]
  7. Pfeifer, Christian, 2004. "Fairness und Kündigungen : eine theoretische und empirische Analyse (Fairness and layoffs * a theoretical and empirical analysis)," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 37(2), pages 127-145. [Downloadable!]
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