Changes in the Employment Contract? Evidence from a Quasi-Experiment

25 Pages Posted: 9 May 2002

See all articles by Gary Charness

Gary Charness

University of California, Santa Barbara (UCSB) - Department of Economics

David I. Levine

University of California, Berkeley - Haas School of Business

Date Written: December 1999

Abstract

Many authors have discussed an apparent shift to a new employment contract characterized by less commitment between employer and employee, and closer ties between wages within the enterprise and those in the external labor market. We study the issue of when people in the U.S. and Canada feel pay cuts are fair. In contrast to much previous discussion, we find no evidence of increasing acceptance of pay cuts--a measure of whether external, not internal, labor markets are considered fair. These results suggest that new organizational forms might do well to preserve some features of the "old" employment contract.

Suggested Citation

Charness, Gary and Levine, David Ian, Changes in the Employment Contract? Evidence from a Quasi-Experiment (December 1999). Available at SSRN: https://ssrn.com/abstract=311361 or http://dx.doi.org/10.2139/ssrn.311361

Gary Charness (Contact Author)

University of California, Santa Barbara (UCSB) - Department of Economics ( email )

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David Ian Levine

University of California, Berkeley - Haas School of Business ( email )

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