Efficient Contracts with Costly Adjustment: Short-RUn Employment Determination for Airline Mechanics

David Card

No 1931, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper presents an empirical analysis of firm-specific employment and wage outcomes for mechanics in the domestic airline industry. A dynamic contracting model is presented that incorporates both costly employment adjustment and potential gaps between contract wage rates and the opportunity value of workers' time. The model gives a useful description of the employment-output linkage in the data, but is less successful in capturing the dynamic relation between employment, contract wage rates, and wage rates outside the airline industry.

Date: 1986-05
Note: LS
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Citations: View citations in EconPapers (27)

Published as Card, David. "Efficient Contracts with Costly Adjustment: Short-Run Employment Determination for Airline Mechanics," American Economic Review, Vol. 7 6, No. 5, December 1986, pp.1045-1071.

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Journal Article: Efficient Contracts with Costly Adjustment: Short-run Employment Determination for Airline Mechanics (1986)
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