Who pays for workplace benefits?
Maurizio Caserta,
Livio Ferrante and
Francesco Reito
Manchester School, 2020, vol. 88, issue 4, 556-574
Abstract:
In a simple model with hidden action, we analyze the role of nonwage benefits (perks) in the structure of incentive‐compatible contracts. We show that the provision of perks depends on the size of the agent’s reservation wage. The two main results are: (a) for low levels of the reservation wage, perks are never provided by the principal, but the agent may decide to buy, as own consumption, a certain amount of private benefits; (b) for high levels, the principal may find it profitable to offer perks, and the equilibrium quantity increases more than proportionally with the reservation wage, up to the first‐best level.
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations:
Downloads: (external link)
https://doi.org/10.1111/manc.12310
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:bla:manchs:v:88:y:2020:i:4:p:556-574
Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1463-6786
Access Statistics for this article
Manchester School is currently edited by Keith Blackburn
More articles in Manchester School from University of Manchester Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().