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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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    1. Gustman, Alan L & Steinmeier, Thomas L, 1986. "A Structural Retirement Model," Econometrica, Econometric Society, vol. 54(3), pages 555-584, May.
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    3. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1.
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    6. 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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    8. Lorne Carmichael, 1983. "Firm-Specific Human Capital and Promotion Ladders," Bell Journal of Economics, The RAND Corporation, vol. 14(1), pages 251-258, Spring.
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    14. 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.
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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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