EconPapers    
Economics at your fingertips  
 

Transaction Costs and the Employment Contract in the US Economy

W. Bentley Macleod and Daniel Parent ()

Journal of Law, Economics, and Organization, 2015, vol. 31, issue suppl_1, i40-i76

Abstract: The purpose of this article is to use transaction cost economics (as in Williamson, O.E., M.L. Wachter, and J.E. Harris. 1975. "Understanding the Employment Relation: The Analysis of Idiosyncratic Exchange," 6(1) Bell Journal of Economics 250–78; Williamson, O.E. 1981. "The Economics of Organization: The Transaction Cost Approach," 87(3) American Journal of Sociology 548–77) to explore the relationship between job characteristics and observed employment contracts. Transaction cost considerations lead to jobs characterized by either normal or complex exchange. This in turn implies two contracting modes: contingent pay (fixed wage or piece-rate/commission contract) or noncontingent pay (salary with possibly a bonus). We show empirically that observed job characteristics, as measured by the Dictionary of Occupational Titles, can explain the contract form observed in the Panel Study on Income Dynamics. Second, we discuss the implications of contract form for wages and mobility, and show that noncontingent pay jobs have more able workers in more durable relationships. (JEL J31, J33, J41, K31)

Date: 2015
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://hdl.handle.net/10.1093/jleo/ewu005 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Transactions Costs and the Employment Contract in the US Economy (2013) Downloads
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:oup:jleorg:v:31:y:2015:i:suppl_1:p:i40-i76.

Ordering information: This journal article can be ordered from
http://www.oup.co.uk/journals

Access Statistics for this article

Journal of Law, Economics, and Organization is currently edited by Pablo T. Spiller

More articles in Journal of Law, Economics, and Organization from Oxford University Press Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK.
Bibliographic data for series maintained by Oxford University Press ().

 
Page updated 2019-08-13
Handle: RePEc:oup:jleorg:v:31:y:2015:i:suppl_1:p:i40-i76.