Advanced Search
MyIDEAS: Login

Multiperiod Wage Contracts and Productivity Profiles

Contents:

Author Info

  • Jerry Timmins
  • Dan Bernhardt

Abstract

Creditors do not generally honor human capital as collateral. This paper demonstrates how long term wages contracts between workers and firms can circumvent the capital market imperfection. Generation of firm specific skills creates an economic bond between worker and firm. This bond enables the firm to transfer loans to an impatient worker in the form of wages in excess of what the worker is initially worth to the firm. Subsequently, the value of the worker's marginal product to the employer exceeds his spot market value enabling the firm to recoup its loans to the worker through lower wages and still retain his services. The model can be used to identify unobserved increments in a worker's general skills from the observed wage path, and to explain interindustry disparities in wage paths and statistical discrimination by firms.

Download Info

To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Bibliographic Info

Paper provided by Queen's University, Department of Economics in its series Working Papers with number 644.

as in new window
Length: 26 pages
Date of creation: 1985
Date of revision:
Handle: RePEc:qed:wpaper:644

Contact details of provider:
Postal: Kingston, Ontario, K7L 3N6
Phone: (613) 533-2250
Fax: (613) 533-6668
Email:
Web page: http://qed.econ.queensu.ca/
More information through EDIRC

Related research

Keywords:

Other versions of this item:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Luigi Guiso & Luigi Pistaferri & Fabiano Schivardi, 2013. "Credit within the Firm," Review of Economic Studies, Oxford University Press, vol. 80(1), pages 211-247.
  2. Lam, Kit-Chun & Liu, Pak-Wai & Wong, Yue-Chim, 1995. "Wage structure when wage offers are private," Labour Economics, Elsevier, vol. 2(1), pages 19-32, March.
  3. Lam, Kit-Chun & Liu, Pak-Wai, 2000. "Verifiable wage offers and recontracting: effect on wage and consumption profiles," Labour Economics, Elsevier, vol. 7(4), pages 449-462, July.
  4. Scoones, David, 2000. "Matching and competition for human capital," Labour Economics, Elsevier, vol. 7(2), pages 135-152, March.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:qed:wpaper:644. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Babcock).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.