Wage dynamics in long-term contracts

Philip Jung () and Moritz Kuhn

No 556, 2013 Meeting Papers from Society for Economic Dynamics

Abstract: We prove existence, monotonicity and differentiability of firm profits and provide first-order conditions that characterize the properties of the optimal contract. We demonstrate how the shape of the contract depends on the persistence and variance of the productivity process, on worker and firm risk, and on non-pecuniary utility components.

Date: 2013
New Economics Papers: this item is included in nep-dge and nep-mic
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