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on Labour Economics |
| By: | Nordlund, Madelende (The Department of Sociology, Umeå University); Strandh, Mattias (The Department of Sociology, Umeå University) |
| Abstract: | In this study we address the relationship of self-reported reservation wages (RW) (the lowest offered income at which an unemployed persona will accept a job offer), the income replacement rate of unemployment benefit (IRUB) and psychosocial need for employment with job search intensity and reemployment probabilities among unemployed in Sweden in 1996-1997. The results indicate that the RWs reported by the group that we observe over time were relatively stable, but strongly related to IRUB and both the gender and age of the unemployed individuals. Interestingly, IRUB was related to search intensity, but not reemployment probabilities, while the RW was related to reemployment probabilities but not search intensity. These findings suggest that IRUB might be a poor proxy for RWs, in some situations at least. In sharp contrast, psychosocial incentives appeared to be related to both search intensity and reemployment probabilities, indicating a need for a richer understanding of search behaviour and unemployment durations. The data also indicate that the roles of search behaviour and incentives for reemployment probabilities may be exaggerated which, at least under the relatively depressed labour market conditions our data represented, appeared to be much more strongly related to human capital and demand for labour for our study population. |
| Keywords: | Reservation wage; income replacement rate; psychosocial need of work; job search intensity; human capital; job-chances |
| JEL: | J64 |
| Date: | 2014–10–14 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2014_023&r=lab |
| By: | Jorge De la Roca; Gianmarco I. P. Ottaviano; Diego Puga |
| Abstract: | Higher ability workers benefit more from bigger cities while housing costs there are higher for everyone, and yet there is little sorting on ability. A possible explanation is that young individuals have an imperfect assessment of their ability, and, when they learn about it, early decisions have had a lasting impact and reduce their incentives to move. We formalize this idea through an overlapping generations model of urban sorting by workers with heterogenous ability and self-confidence, with the latter defined as individuals' assessment of their own ability. We then test the location patterns predicted by the model over the life cycle on panel data from the National Longitudinal Survey of Youth 1979. We find that the city-size choices of individuals at different stages vary with ability and self-confidence in a way that closely matches our theoretical predictions. |
| Keywords: | Cities, sorting, agglomeration, self-confidence, learning |
| JEL: | R10 R23 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1305&r=lab |
| By: | Bertrand, Marianne (Chicago Booth School of Business); Black, Sandra E. (The University of Texas at Austin); Jensen, Sissel (Dept. of Economics, Norwegian School of Economics and Business Administration); Lleras-Muney, Adriana (UCLA) |
| Abstract: | In late 2003, Norway passed a law mandating 40 percent representation of each gender on the board of publicly limited liability companies. The primary objective of this reform was to increase the representation of women in top positions in the corporate sector and decrease gender disparity in earnings within that sector. We document that the newly (post-reform) appointed female board members were observably more qualified than their female predecessors, and that the gender gap in earnings within boards fell substantially. While the reform may have improved the representation of female employees at the very top of the earnings distribution (top 5 highest earners) within firms that were mandated to increase female participation on their board, there is no evidence that these gains at the very top trickled-down. Moreover the reform had no obvious impact on highly qualified women whose qualifications mirror those of board members but who were not appointed to boards. We observe no statistically significant change in the gender wage gaps or in female representation in top positions, although standard errors are large enough that we cannot rule economically meaningful gains. Finally, there is little evidence that the reform affected the decisions of women more generally; it was not accompanied by any change in female enrollment in business education programs, or a convergence in earnings trajectories between recent male and female graduates of such programs. While young women preparing for a career in business report being aware of the reform and expect their earnings and promotion chances to benefit from it, the reform did not affect their fertility and marital plans. Overall, in the short run the reform had very little discernible impact on women in business beyond its direct effect on the newly appointed female board members. |
| Keywords: | Gender discrimination; board of directors. |
| JEL: | J01 J13 |
| Date: | 2014–08–29 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhheco:2014_028&r=lab |
| By: | LIU Xing; SIERMINSKA Eva |
| Abstract: | Examining the effect of beauty on labor market outcomes has become a growing field of labor economics. In fact, the way the labor market rewards physical attractiveness has become an important underlying determinant of wage discrimination, as well as the gender wage gap. In this article, we survey the extensive literature on this topic paying particular attention to the channels through which beauty may affect wage differentials. Overall our survey confirms the existence of a positive association between beauty and labor market outcomes such as earnings and employment opportunities (call-back rates). Further research is needed on the effect of attractiveness within occupations in order to provide more evidence on its productivity-enhancing channel of transmission and the effect this has on the gender wage gap, as well as on the endogeneity of beauty. |
| Keywords: | Beauty premium; Discrimination; Gender differentials; Occupational sorting; Human capital model; Physical attractiveness; Wages; Productivity; Stereotypes; Cross-country |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:irs:cepswp:2014-11&r=lab |
| By: | Leonardo Fabio Morales; Lina Marcela Cardona-Sosa |
| Abstract: | Using data from Medellín, second largest city in Colombia, we asses in this paper how a set of neighborhood characteristics determines wages and labor supply for workers in the city. We use GIS data to construct measures of the quality of environments where workers live. This paper focuses in the impact in labor supply and wages of the following set of characteristics: availability of public transportation, crime levels and density of economic activity. The empirical methodology consist of the estimation of linear equations for wages and worked hours, and we control for the selection of individuals into the neighborhoods they are observed. In order to do this we estimate in a first stage a probabilistic model of neighborhood selection from which selection correction terms are obtained; these correction terms and included in the linear equations for wage and worked hours in a second stage. In addition, we control for sample selection as well. We find that the endogeneity of the location decision tends to overestimate the magnitude of the effect of neighborhood characteristics on labor market outcomes. Nevertheless, the effect of some characteristics is still significant and important after we control for the possibility of selection into neighborhoods. |
| Keywords: | Labor Economics, Labor Supply, Urban Analysis, Housing Demand. |
| JEL: | J01 J22 O18 R21 |
| Date: | 2014–09–11 |
| URL: | http://d.repec.org/n?u=RePEc:col:000094:012163&r=lab |
| By: | Masayuki Morikawa |
| Abstract: | This paper compares the wage structure between the public and private sectors in Japan by using a large microdata set covering public and private sector employees. Rather than comparing overall wage levels, we examine the differences in relative wages by gender, age, education, and region. According to the estimation of wage functions, wage gaps by gender and educational attainment are smaller in the public sector than in private companies. The public sector’s age-wage profile is steeper than that of the private sector. Public sector wages are more compressed; the wages are relatively higher at the lower end of the wage distribution and relatively lower at the higher end. The regional wage differential is smaller in the public sector. As a result, the wage level of public sector workers is relatively higher in rural regions and relatively lower in large metropolitan regions. To ensure the efficient provision of public services, it is inappropriate to compare only average wages. We should carefully observe the differences in wage structure by individual characteristics and by region. |
| Keywords: | public sector, wage gap, age-wage profile, regional wage differential |
| JEL: | J31 J45 R23 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2014-67&r=lab |
| By: | Antonio Di Paolo (Faculty of Economics, University of Barcelona); Ferran Mañé (Faculty of Economics, Rovira i Virgili University) |
| Abstract: | Drawing on a very rich data set from a recent cohort of PhD graduates, we examine the correlates and consequences of qualification and skills mismatch. We show that job characteristics such as the economic sector and the main activity at work play a fundamental direct role in explaining the probability of being well matched. However, the effect of academic attributes seems to be mainly indirect, since it disappears once we control for the full set of work characteristics. We detected a significant earnings penalty for those who are both overqualified and overskilled and also showed that being mismatched reduces job satisfaction, especially for those whose skills are underutilized. Overall, the problem of mismatch among PhD graduates is closely related to demand-side constraints of the labor market. Increasing the supply of adequate jobs and broadening the skills PhD students acquire during training should be explored as possible responses. |
| Keywords: | overskilling, overqualification, doctors, earnings, job satisfaction JEL classification: I20, J24, J28, J31 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:ira:wpaper:201426&r=lab |
| By: | Ilhom Abdulloev (Open Societies Institute, Dushanbe); Ira N. Gang; Myeong-Su Yun |
| Abstract: | Women who want to work often face many more hurdles than men. This is true in Tajikistan where there is a large gender gap in labour force participation. We highlight the role of two factors – international migration and education – on the labour force participation decision and its gender gap. Using probit and decomposition analysis, our investigation shows that education and migration have a significant association with the gender gap in labour force participation in Tajikistan. International emigration from Tajikistan, in which approximately 93.5% of the participants are men, reduces labour force participation by men domestically; increased female education, especially at the university and vocational level, increases female participation. Both women acquiring greater access to education and men increasing their migration abroad contribute to reducing the gender gap. |
| Keywords: | migration, education, gender gap, labour force participation, Tajikistan |
| JEL: | J01 J16 O15 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:ost:wpaper:342&r=lab |
| By: | Balsvik, Ragnhild (Dept. of Economics, Norwegian School of Economics and Business Administration); Sæthre, Morten (Dept. of Economics, Norwegian School of Economics and Business Administration) |
| Abstract: | We present a bargaining model of wage and employment determination, where we show that foreign acquisitions might hurt the bargaining outcome of powerful unions by giving the fi rm a credible threat to move production abroad. Using detailed data on fi rms and workers in manufacturing, including information on union membership and foreign ownership, we fi nd, in line with the predictions of our model, that foreign acquisitions negatively impact the outcome of workers in highly unionized plants. |
| Keywords: | Foreign acquisitions; trade unions; wages. |
| JEL: | F23 J30 J51 |
| Date: | 2014–09–16 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhheco:2014_030&r=lab |
| By: | Chris Dawson (School of Management, University of Bath, UK); Michail Veliziotis (Department of Accounting, Economics and Finance, University of the West of England, Bristol, UK); Gail Pacheco (Department of Economics, Faculty of Business and Law, Auckland University of Technology); Don Webber (Department of Accounting, Economics and Finance, University of the West of England, Bristol, UK) |
| Abstract: | Mental health status often has a strong association with labour market outcomes. If people in temporary employment have poorer mental health than those in permanent employment then it is consistent with two mutually inclusive possibilities: temporary employment generates adverse mental health effects and/or individuals with poorer mental health select into temporary from permanent employment. We reveal that permanent workers with poor mental health appear to select into temporary employment thus signalling that prior cross sectional studies may overestimate the influence of employment type on mental health. We also reveal that this selection effect is significantly mitigated by job satisfaction. |
| Keywords: | Employment transitions; Psychological distress; Anxiety; Life satisfaction; Job dissatisfaction |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:aut:wpaper:201406&r=lab |
| By: | Niels Vermeer; Mauro Mastrogiacomo (DNB; VU; Netspar); Arthur van Soest (Tilburg University; Netspar) |
| Abstract: | In the policy debate on increasing the statutory retirement age, the issue has been raised to make an exception for workers with demanding occupations, since health considerations may make it unreasonable to expect them to work longer. We use unique Dutch survey data to analyze the general public’s opinions on what are demanding occupations, to what extent it is justified that someone with a demanding occupation can retire earlier, and on the willingness to contribute to an earlier retirement scheme for such occupations through higher taxes. A representative sample of Dutch adults answered several questions about hypothetical persons with five different jobs. Panel data models are used to analyze the answers, accounting for confounding factors affecting the evaluations of the demanding nature of the jobs as well as their reasonable retirement age or willingness to contribute to an early retirement scheme. The Dutch public thinks that workers in demanding occupations should be able to retire earlier. A one standard deviation increase in the perceived demanding nature of an occupation translates into a one year decrease in the reasonable retirement age and a 30 to 40 percentage points increase in the willingness to contribute to an early retirement scheme for that occupation. There is some evidence that respondents whose own job is similar to the occupation they evaluate find this occupation more demanding than other respondents but respondents are also willing to contribute to early retirement of occupations that are not similar to their own. |
| JEL: | J26 J81 H55 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:291&r=lab |
| By: | Jesús M. Carro; Matilde P. Machado; Ricardo Mora |
| Abstract: | Recently, economists have established that culture—defined as a common set of preferences and beliefs —affects economic outcomes, including the levels of female labor force participation. Although this literature has argued that culture is transmitted from parents to children, it has also recognized the difficulty in empirically disentangling the parental transmission of preferences and/or beliefs from other confounding factors, such as technological change or investment in education. Using church registry data from the 18th and 19th centuries, our primary contribution is to interpret the effect of a mother’s labor participation status on that of her daughter as the mother-to-daughter transmission of preferences and/or beliefs that are isolated from confounding effects. Because our data are characterized by abundant non-ignorable missing information, we estimate the participation model and the missing process jointly by maximum likelihood. Our results reveal that the mother’s working status has a large and statistically significant positive effect on the daughter’s probability of working. These findings suggest that intergenerational family transmission of preferences and/or beliefs played a decisive role in the substantial increases in female labor force participation that occurred later. |
| Keywords: | Female labor market participation, Intergenerational transmission of preferences and/or beliefs, Historical family data, Church registry data, Non-ignorable missingness, Econometric methods for missing data |
| JEL: | J22 J24 J16 J12 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:cte:werepe:we1421&r=lab |
| By: | Vimal Ranchhod (SALDRU, School of Economics, University of Cape Town); Arden Finn (SALDRU, School of Economics, University of Cape Town) |
| Abstract: | What effect did the introduction of the Employment Tax Incentive (ETI) have on youth employment probabilities in South Africa in the short run? The ETI came into effect on the 1st of January 2014. Its purpose is to stimulate youth employment levels and ease the challenges that many youth experience in finding their first jobs. Under the ETI, firms that employ youth are eligible to claim a deduction from their taxes due, for the portion of their wage bill that is paid to certain groups of youth employees. We utilize nationally representative Quarterly Labour Force Survey (QLFS) data for the period from January 2011 to June 2014, and implement a difference-in-differences methodology at the individual level to identify the effects of the ETI on youth employment probabilities. Our primary finding is that the ETI did not have any statistically significant and positive effects on youth employment probabilities. The point estimate from our preferred regression is -0.005 and the 95% confidence interval is from -0.017 to 0.006. We thus obtain a fairly precisely estimated 'zero effect'. We also find no evidence that the ETI has resulted in an increase in the level of churning in the labour market for youth. What our results imply is that any decrease in tax revenues that arise from the ETI are effectively accruing to firms which, collectively, would have employed most of these youth even in the absence of the ETI. We conclude with a discussion of some of the policy implications of our findings. |
| Keywords: | Youth, Unemployment, South Africa, Employment Tax Incentive |
| JEL: | H25 H32 J38 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ldr:wpaper:134&r=lab |
| By: | Joan Llull |
| Abstract: | This paper estimates the effect of immigration on native wages at the national level taking into account the endogenous allocation of immigrants across skill cells. Time-varying exogenous variation across skill cells for a given country is provided by interactions of push factors, distance, and skill cell dummies: distance mitigates the effect of push factors more severely for less educated and middle experienced. Because the analysis focuses on the United States and Canada, I propose a two-stage approach (Sub-Sample 2SLS) that estimates the first stage regression with an augmented sample of destination countries, and the second stage equation with the restricted sub-sample of interest. I derive asymptotic results for this estimator, and suggest several applications beyond the current one. The empirical analysis indicates a substantial bias in estimated OLS wage elasticities to immigration. Sub-Sample 2SLS estimates average – 1:2 and are very stable to the use of alternative instruments. |
| Keywords: | immigration, wages, sub-sample two-stage least squares |
| JEL: | J31 J61 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:783&r=lab |
| By: | Ager, Philipp; Brückner, Markus; Herz, Benedikt |
| Abstract: | In the beginning of the 1890s, counties located in the Cotton Belt of the American South were hit by an agricultural plague, the boll weevil, that adversely affected cotton production and hence the demand for labor. We use variation in the incidence of the boll weevil multiplied with counties’ initial cotton share to construct instrumental variables estimates of the labor supply curve. Controlling for county and state-by-time fixed effects, we find a significant positive response of labor supply to changes in labor income. The effect is particularly large for females, consistent with evidence that females had a comparative advantage in picking cotton. |
| Keywords: | Labor Supply, Female Labor Force Participation, Agricultural Productivity Shocks, US South, Boll Weevil |
| JEL: | E24 J16 J21 N3 N31 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:59410&r=lab |
| By: | Ahmed Fayez Abdelgouad (Leuphana University Lueneburg, Germany) |
| Abstract: | This study introduces a review of the institutional framework in the Egyptian labor market to show how it is regulated by discussing extensively the most recent labor law regulations in Egypt and the main reasons behind enacting this law. The paper guides also to different data sources that can be used and highlights a number of empirical studies about the labor market in Egypt. Finally, itconcludes that further reforms are still required to improve labor market efficiency in Egypt. |
| Keywords: | labor law, reforms, labor market flexibility, Egypt |
| JEL: | J31 J41 J51 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:314&r=lab |
| By: | Clémence Berson (Centre d'Economie de la Sorbonne) |
| Abstract: | The integration of immigrants and their children is a burning issue in France. Governments build a large part of their assimilation policies on the labor market. The public sector is reputed to better assimilate minorities because of its entrance exams and pay-scales. In this paper, a comparison of the public and private sectors shows that second-generation immigrants are not treated equally. However, the wage gap is determined by the number and gender of immigrant parents and not by the country of origin. |
| Keywords: | Discrimination, wage gap, public-private sectors, France. |
| JEL: | C35 J31 J45 J71 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:09059r&r=lab |
| By: | Henk-Wim de Boer; Egbert Jongen; Jan Kabatek |
| Abstract: | We study the relative effectiveness of fiscal stimuli for working parents in an empirical model of household labour supply and childcare use. We use a large and rich administrative dataset for the Netherlands. To promote the labour participation of parents with young children, governments employ a number of fiscal instruments. Prominent examples are childcare subsidies and in-work benefits. However, which policy works best for employment is largely unknown. We study the relative effectiveness of fiscal stimuli for working parents in an empirical model of household labour supply and childcare use. We use a large and rich administrative dataset for the Netherlands. Large-scale reforms in childcare subsidies and in-work benefits in the data period benefit the identification of the parameters. We find that an in-work benefit for secondary earners that increases with income is the most cost-effective way of stimulating total hours worked of parents with young children. Childcare subsidies and a `flat' in-work benefit for secondary earners are somewhat less cost-effective. In-work benefits for both primary and secondary earners are much less cost-effective, since the former are rather unresponsive to financial incentives. |
| JEL: | C25 C52 H31 J22 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:286&r=lab |
| By: | Todd Schoellman (Arizona State University); Berthold Herrendorf (Arizona State University) |
| Abstract: | We document for nine countries ranging from rich (Canada, U.S.) to poor (India, Indonesia) that average wages are higher in non–agriculture than in agriculture. We measure sectoral human capital and find that it accounts for the entire wage gap in the U.S. and most of the wage gaps elsewhere. We develop a multi–sector model that explains these finding if: (i) Mincer returns to schooling are equal in both sectors; (ii) more able workers sort into non–agriculture; (iii) distortions to the allocation of labor between sectors are negligible in the U.S. and small elsewhere. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed014:364&r=lab |
| By: | Rupayan Pal (Indira Gandhi Institute of Development Research); Udayan Rathore (Indira Gandhi Institute of Development Research) |
| Abstract: | We examine implications of industrial deregulations, trade liberalisation and labour regulations on workers' bargaining power and firms' markup in Indian manufacturing industries, using state-wise three-digit industry-level panel data for the period 1980-2007. Results of our econometric analysis suggest that both industrial deregulations and trade liberalisation led to significant declines in workers bargaining power, which was already less than 6.7 on an average during pre-reform era. However, none of these reforms appears to have any significant effect on firms' markup. Our results also suggest that amendments to labour regulation by State governments, which aim to simplify procedures and reduce costs of industrial dispute resolutions, have a significant positive effect on workers' bargaining power. Surprisingly, amendments to Employment Protection Legislations do not appear to have any significant effect on workers' bargaining power. We also document considerable variation in firms' markup and workers' bargaining power across industry-groups and States. |
| Keywords: | Workers bargaining power, firms markup, industrial deregulations, trade liberalisation, labour regulations, India |
| JEL: | J50 L13 F16 L60 O14 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:ind:igiwpp:2014-037&r=lab |
| By: | Jin, Xin |
| Abstract: | This article studies the consequences of firm delayering on wages and the wage distribution inside firms. I consider a job-assignment model with asymmetric information and a slot constraint. The model predicts that more efficient firms are not necessarily larger than less efficient firms if firms are allowed to adjust their internal organizational structure through delayering. After delayering, wages at all levels increase and the wage distribution becomes more unequal. These predictions match a set of empirical findings in recent studies that are not well explained by existing theories. |
| Keywords: | delayer, asymmetric information, promotion, slot constraint |
| JEL: | J31 M51 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:58485&r=lab |
| By: | Chu, Angus C.; Cozzi, Guido; Furukawa, Yuichi |
| Abstract: | This study explores the macroeconomics effects of labor unions in a two-country model of directed technical change in which the market size of each country determines the incentives for innovation. We find that an increase in the bargaining power of a wage-oriented union leads to a decrease in employment in the domestic economy. This result has two important implications on innovation. First, it reduces the rates of innovation and economic growth. Second, it causes innovation to be directed to the foreign economy, which in turn causes a negative effect on domestic wages relative to foreign wages in the long run. We also calibrate our model to data in the US and the UK. We find that the degree of unions' wage preference must be stronger in the UK than in the US in order for the calibrated economies to replicate the simultaneous decrease in labor income share and unemployment in the two countries. We also explore the quantitative implications of labor unions on social welfare and relative wage across countries. In summary, our calibrated model is able to explain about half of the decrease in relative wage between the US and the UK from 1980 to 2007. |
| Keywords: | economic growth, R&D, labor unions, income inequality |
| JEL: | E24 J51 O30 O43 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:58886&r=lab |
| By: | Wesselbaum, Dennis |
| Abstract: | This paper provides evidence for the size of firing costs for eight countries. In contrast to the existing literature, we use the optimality conditions obtained in a search and matching model to find a reduced form equation for firing costs. We find that our estimates are slightly larger compared with other studies. Finally, we offer three explanations for the observed cross-country patterns. |
| Keywords: | Employment protection, Firing costs, Optimality conditions. |
| JEL: | C22 J41 J63 |
| Date: | 2014–06–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:58762&r=lab |
| By: | Josse Delfgaauw (Erasmus University Rotterdam); Michiel Souverijn (Erasmus University Rotterdam, the Netherlands) |
| Abstract: | When verifiable performance measures are imperfect, organizations often resort to subjective performance pay. This may give supervisors the power to direct employees towards tasks that mainly benefit the supervisor rather than the organization. We cast a principal-supervisor-agent model in a multitask setting, where the supervisor has an intrinsic preference towards specific tasks. We show that subjective performance pay based on evaluation by a biased supervisor has the same distorting effect on the agent's effort allocation as incentive pay based on an incongruent performance measure. If the principal can combine incongruent performance measures with biased supervision, the distortion in the agent's efforts is mitigated, but cannot always be eliminated. We apply our results to the choice between specialist and generalist middle managers, where a trade-off between expertise and bias may arise. |
| Keywords: | subjective performance evaluation, middle managers, incentives, multitasking |
| JEL: | J24 M12 M52 |
| Date: | 2014–08–25 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20140115&r=lab |