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Wages, Hours and Human Capital over the Live Cycle

Author

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  • Hart, Robert A.

    (University of Stirling)

  • Ma, Yue

    (City University of Hong Kong)

Abstract

We investigate wage-hours contracts within a four-period rent sharing model that incorporates asymmetric information. Distinctions are made among (a) an investment period, (b) a period in which the parties may separate (quits or layoffs) or continue rent accumulation and sharing, (c) a post investment period and, (d) retirement. We establish that increases in both wage rates and hours of work in the post-investment period serve to minimise sub-optimal separations and, moreover that both wage and hours schedules are concave. The model is tested with the British Household Panel Survey (1991-1997) and with the British Labour Force Survey (1993/4).

Suggested Citation

  • Hart, Robert A. & Ma, Yue, 2000. "Wages, Hours and Human Capital over the Live Cycle," IZA Discussion Papers 139, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp139
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    References listed on IDEAS

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    Cited by:

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    More about this item

    Keywords

    Lifetime wage-hours contracts; estimated wage- and hour-tenure profiles; asymmetric information;
    All these keywords.

    JEL classification:

    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

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