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Changes In The Employment Contract? Evidence From A Quasi-Experiment

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  • Charness, Gary B
  • Levine, David I. I.

Abstract

Many authors have discussed an apparent shift to a new employment contract characterized by less commitment between employer and employee, and 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. 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 features of the “old†employment contract.

Suggested Citation

  • Charness, Gary B & Levine, David I. I., 1999. "Changes In The Employment Contract? Evidence From A Quasi-Experiment," University of California at Santa Barbara, Economics Working Paper Series qt5jz354m3, Department of Economics, UC Santa Barbara.
    • Handle: RePEc:cdl:ucsbec:qt5jz354m3
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    1. David Card & Richard B. Freeman, 1993. "Introduction to "Small Differences That Matter: Labor Markets and Income Maintenance in Canada and the United States"," NBER Chapters,in: Small Differences That Matter: Labor Markets and Income Maintenance in Canada and the United States, pages 1-20 National Bureau of Economic Research, Inc.
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    12. Timothy J. Bartik, 2000. "Displacement and Wage Effects of Welfare Reform," Book chapters authored by Upjohn Institute researchers,in: David E. Card & Rebecca M. Blank (ed.), Finding Jobs: Work and Welfare Reform, pages 72-122 W.E. Upjohn Institute for Employment Research.
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    Cited by:

    1. Gary Charness & David I. Levine, 2000. "When are Layoffs Acceptable? Evidence from a Quasi-Experiment," ILR Review, Cornell University, ILR School, vol. 53(3), pages 381-400, April.
    2. Gary Charness, 2004. "Attribution and Reciprocity in an Experimental Labor Market," Journal of Labor Economics, University of Chicago Press, vol. 22(3), pages 665-688, July.
    3. Arnaldo Camuffo, 2002. "The Changing Nature of Internal Labor Markets," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 6(4), pages 281-294, December.
    4. Gerlach, Knut & Levine, David I. & Stephan, Gesine & Struck, Olaf, 2005. "The Acceptability of Layoffs and Pay Cuts: Comparing North America with Germany," Institute for Research on Labor and Employment, Working Paper Series qt1k21d0rg, Institute of Industrial Relations, UC Berkeley.
    5. repec:ebl:ecbull:eb-17-00049 is not listed on IDEAS
    6. repec:iab:iabzaf:v:37:i:2:p:127-145 is not listed on IDEAS
    7. Danielson, Anders J. & Holm, Hakan J., 2007. "Do you trust your brethren?: Eliciting trust attitudes and trust behavior in a Tanzanian congregation," Journal of Economic Behavior & Organization, Elsevier, vol. 62(2), pages 255-271, February.
    8. Gesine Stephan & Sven Uthmann, 2014. "Wann wird negative Reziprozität am Arbeitsplatz akzeptiert? Eine quasi-experimentelle Untersuchung," Working Paper Series in Economics 321, University of Lüneburg, Institute of Economics.
    9. Gerhards, Leonie & Heinz, Matthias, 2017. "In good times and bad – Reciprocal behavior at the workplace in times of economic crises," Journal of Economic Behavior & Organization, Elsevier, vol. 134(C), pages 228-239.
    10. 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.
    11. 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.

    More about this item

    Keywords

    fairness; survey; entitlements; new employment contract; acceptability;

    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts

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