The Ratchet Effect and the Market for Secondhand Workers

Yoshitsugu Kanemoto and W. Bentley Macleod

Journal of Labor Economics, 1992, vol. 10, issue 1, 85-98

Abstract: Workers in a long-term relationship often have an incentive to hide their ability early in the relationship to avoid having the firm increase the level of output expected from them in the future. The authors show that competition for older workers will permit the implementation of efficient piece-rate contracts. When the difficulty of the job is unobserved by the firm, Robert Gibbons (1987) has shown that all piece-rate contracts will be inefficient. Together, these results may explain why piece rates are common in some jobs, such as agricultural work and sales, and not as popular for many manufacturing jobs. Copyright 1992 by University of Chicago Press.

Date: 1992
References: Add references at CitEc
Citations: View citations in EconPapers (59)

Downloads: (external link)
http://dx.doi.org/10.1086/298279 full text (application/pdf)
Access to full text is restricted to subscribers. See http://www.journals.uchicago.edu/JOLE for details.

Related works:
Working Paper: The Ratchet Effect and the Market for Second-Hand Workers (1990)
Working Paper: THE RATCHET EFFECT AND THE MARKET FOR SECOND-HAND WORKERS (1990)
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:ucp:jlabec:v:10:y:1992:i:1:p:85-98

Access Statistics for this article

More articles in Journal of Labor Economics from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().