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Adjustment of Deferred Compensation Schemes, Fairness Concerns, and Hiring of Older Workers

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  • Christian Pfeifer

    ()
    (Institute of Economics, Leuphana University of Lüneburg, Germany)

Abstract

Hutchens (1986, Journal of Labor Economics 4(4), pp. 439-457) argues that deferred compensation schemes impose fixed-costs to firms and, therefore, they employ older workers but prefer to hire younger workers. This paper shows that deferred compensation can be a recruitment barrier even without these fixed-costs, because adjustments of wage-tenure profiles for older new entrants can lead to adverse incentive effects from a fairness perspective. A personnel data set and a linked employeremployee data set reveal that wage-tenure profiles of white-collar workers are indeed adjusted according to entry age but that firms still hire few older workers.

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Bibliographic Info

Paper provided by University of Lüneburg, Institute of Economics in its series Working Paper Series in Economics with number 151.

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Length: 56 pages
Date of creation: Nov 2009
Date of revision:
Handle: RePEc:lue:wpaper:151

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Web page: http://leuphana.de/institute/ivwl.html

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Keywords: deferred compensation; entry age; fairness; internal labor markets; wages;

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Cited by:
  1. Stephan Humpert, 2012. "Age and Gender Differences in Job Opportunities," Working Paper Series in Economics 235, University of Lüneburg, Institute of Economics.

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