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Wages, Hours and Human Capital over the Live Cycle

Author

Listed:
  • 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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    1. Gustman, Alan L & Steinmeier, Thomas L, 1986. "A Structural Retirement Model," Econometrica, Econometric Society, vol. 54(3), pages 555-584, May.
    2. Hashimoto, Masanori, 1979. "Bonus Payments, on-the-Job Training, and Lifetime Employment in Japan," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 1086-1104, October.
    3. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1.
    4. Johnson, Richard W, 1996. "The Impact of Human Capital Investments on Pension Benefits," Journal of Labor Economics, University of Chicago Press, vol. 14(3), pages 520-554, July.
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    6. Hart, Robert A. & Ma, Yue, 2000. "Why Do Firms Pay an Overtime Premium?," IZA Discussion Papers 163, Institute of Labor Economics (IZA).
    7. Robert A Hart & Robin J Ruffell, 1992. "The Cost of Overtime Hours in British Production Industries," Working Papers Series 92/1, University of Stirling, Division of Economics.
    8. Hashimoto, Masanori & Raisian, John, 1985. "Employment Tenure and Earnings Profiles in Japan and the United States," American Economic Review, American Economic Association, vol. 75(4), pages 721-735, September.
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    10. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
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    12. Malcomson, James M., 1999. "Individual employment contracts," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 35, pages 2291-2372, Elsevier.
    13. Jacob A. Mincer, 1974. "Schooling and Earnings," NBER Chapters, in: Schooling, Experience, and Earnings, pages 41-63, National Bureau of Economic Research, Inc.
    14. repec:eee:labchp:v:3:y:1999:i:pb:p:2291-2372 is not listed on IDEAS
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    Cited by:

    1. Panos, Georgios & Theodossiou, Ioannis, 2010. "Unionism and Peer-Referencing," Stirling Economics Discussion Papers 2010-03, University of Stirling, Division of Economics.
    2. Magali Jaoul-Grammare, 2011. "L’évolution des inégalités dans l’enseignement supérieur universitaire français. L’influence des réformes institutionnelles et des ruptures économiques," Working Papers 11-06, Association Française de Cliométrie (AFC).

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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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