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Job Characteristics and the Form of Compensation

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  • W. Bentley MacLeod

    ()

  • Daniel Parent

    ()

Abstract

In this paper we introduce a way to systematically organize the choice between different forms of compensation based upon observable job characteristics. Secondly, we explore the determinants of compensation based upon questionnaire responses concerning job characteristics and methods of pay contained in the Quality of Employment Survey (QES), the National Longitudinal Survey of Youth (NLSY), the Panel Study of Income Dynamics (PSID), and the Current Population Survey. The0501n conclusion is that there is no single model of the employment relationship that can explain the variation in compensation form. We draw upon both agency and incomplete contract models to study the interplay between job characteristics and compensation. Specific results include a) the number of tasks seems to be associated with the use of incomplete contracts; b) Piece rate jobs tend to be associated with more worker autonomy and fewer tasks performed than hourly paid jobs; c) tight labor market conditions tend to be associated with the use of bonuses and promotions instead of efficiency wages. Cet article cherche à organiser de façon systématique le choix des différentes méthodes de rémunération selon les caractéristiques observables des emplois. Par après, nous examinons de façon empirique les facteurs influençant le choix de ces méthodes en utilisant l'information concernant les caractéristiques des emplois contenue dans le Quality of Employment Survey, le National Longitudinal Survey of Youth, le Panel Study of Income Dynamics et le Current Population Survey. La principale conclusion est qu'il n'existe aucun modèle de la relation d'emploi qui puisse expliquer de façon satisfaisante la variation observée dans les méthodes de compensation.Les résultats plus spécifiques sont les suivants : a) le nombre de tâches semble être associé à l'emploi de contrats incomplets; b) la rémunération à la pièce va de paire avec la parcimonie des tâches de même qu'avec l'autonomie accrue du travailleur; c) un marché du travail local serré tend à être associé avec l'utilisation de bonis et de promotions plutôt que des salaires d'efficience.

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Bibliographic Info

Paper provided by CIRANO in its series CIRANO Working Papers with number 98s-08.

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Date of creation: 01 Mar 1998
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Handle: RePEc:cir:cirwor:98s-08

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Keywords: Job characteristics; methods of pay; incomplete contracts; agency models; Caractéristiques des emplois; méthodes de rémunération; contrats incomplets; modèles d'agence;

References

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  1. Charles Brown, 1990. "Firms' Choice of Method of Pay," NBER Working Papers 3065, National Bureau of Economic Research, Inc.
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  10. Macleod, W.B. & Kenemoto, Y., 1990. "The Ratchet Effect and the Market for Second-Hand Workers," Cahiers de recherche 9027, Universite de Montreal, Departement de sciences economiques.
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  14. Daniel Parent, 1999. "Methods of pay and earnings: A longitudinal analysis," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 53(1), pages 71-86, October.
  15. Krueger, Alan B & Summers, Lawrence H, 1988. "Efficiency Wages and the Inter-industry Wage Structure," Econometrica, Econometric Society, vol. 56(2), pages 259-93, March.
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  30. Moulton, Brent R, 1990. "An Illustration of a Pitfall in Estimating the Effects of Aggregate Variables on Micro Unit," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 334-38, May.
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