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Fixed wage or share: Contingent contract renewal and skipper motivation

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Author Info

  • Thorolfur Matthiasson

Abstract

Fishermen around the world are usually remunerated by shares. Iceland is no exception in that respect. The fixed wage systems,that have been tried out, have been short- lived and their utilization limited. The fundamental question asked in this paper is: Why do almost all vessel owners use the same remuneration principles? The answer offered is that the circumstances under which fishing is conducted play a vital role here. Surveillance of the conduct of employees is almost impossible. Hence, vessel owners must develop some system for motivating workers and to discourage shirking. It is shown that sharing is better than alternative forms of remuneration in that respect. The production unit is a small platform that is not easily abandoned during a trip. The product ofr a given trip is well- defined. All of these factors help to explain the prevalence of sharing in fisheries.

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File URL: http://128.118.178.162/eps/lab/papers/9702/9702002.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Labor and Demography with number 9702002.

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Length: 42 pages
Date of creation: 25 Feb 1997
Date of revision:
Handle: RePEc:wpa:wuwpla:9702002

Note: Type of Document - Acrobat file; prepared on WordPerfect 3.5 for the Mac; to print on Apple LaserWriter; pages: 42 4; figures: included
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Web page: http://128.118.178.162

Related research

Keywords: Remuneration system in fisheries; Contingent Renewal; Skipper Contracts;

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References

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  1. Lazear, Edward P, 1986. "Salaries and Piece Rates," The Journal of Business, University of Chicago Press, vol. 59(3), pages 405-31, July.
  2. Matthiasson, Thorolfur, 1999. "Cost sharing and catch sharing," Journal of Development Economics, Elsevier, vol. 58(1), pages 25-44, February.
  3. Solow, Robert M., 1979. "Another possible source of wage stickiness," Journal of Macroeconomics, Elsevier, vol. 1(1), pages 79-82.
  4. Chong-en Bai & Zhigang Tao, 1997. "Contract Mix and Ownership," Boston College Working Papers in Economics 345., Boston College Department of Economics.
  5. Lee G. Anderson, 1982. "The Share System in Open-Access and Optimally Regulated Fisheries," Land Economics, University of Wisconsin Press, vol. 58(4), pages 435-449.
  6. FitzRoy, Felix R & Kraft, Kornelius, 1986. "Profitability and Profit-Sharing," Journal of Industrial Economics, Wiley Blackwell, vol. 35(2), pages 113-30, December.
  7. Levine, David, 1987. "Efficiency wages in Weitzman's share economy," Economics Letters, Elsevier, vol. 23(3), pages 245-249.
  8. D. Gale Johnson, 1950. "Resource Allocation under Share Contracts," Journal of Political Economy, University of Chicago Press, vol. 58, pages 111.
  9. Eswaran, Mukesh & Kotwal, Ashok, 1985. "A Theory of Contractual Structure in Agriculture," American Economic Review, American Economic Association, vol. 75(3), pages 352-67, June.
  10. Moene, Karl Ove, 1990. "Is profit sharing a cure for unemployment in less developed countries?," Journal of Development Economics, Elsevier, vol. 33(1), pages 89-99, July.
  11. Kraft, Kornelius, 1991. "The Incentive Effects of Dismissals, Efficiency Wages, Piece-Rates and Profit-Sharing," The Review of Economics and Statistics, MIT Press, vol. 73(3), pages 451-59, August.
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Cited by:
  1. Nguyen, Quang, 2009. "choice of remuneration regime in fisheries: the case of Hawaii’s longline fisheries," MPRA Paper 13792, University Library of Munich, Germany.
  2. Matthiasson, Thorolfur, 1999. "Cost sharing and catch sharing," Journal of Development Economics, Elsevier, vol. 58(1), pages 25-44, February.

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