Intrafirm Information Transfers and Wages

Posted: 18 Dec 1996

See all articles by Harry Huizinga

Harry Huizinga

Tilburg University - Center for Economic Research (CentER); Centre for Economic Policy Research (CEPR)

Date Written: January 1996

Abstract

Technical and other information may be a firm's most important asset. To benefit from its information, however, a firm has to reveal it to one or more employees. Better informed employees produce more, but at the same time they demand higher wages to prevent them from joining a business competitor or starting their own firm. This paper examines the strategic transfer of information by a firm to its employees over their employment lives. Generally, the firm is shown to transfer additional information to its employees each period of the employment relationship, while wages rise accordingly. An implication of the model is that more senior workers are more productive and receive higher wages because they have better access to the firm's vital information.

JEL Classification: J31, D82

Suggested Citation

Huizinga, Harry, Intrafirm Information Transfers and Wages (January 1996). Available at SSRN: https://ssrn.com/abstract=3610

Harry Huizinga (Contact Author)

Tilburg University - Center for Economic Research (CentER) ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands
+31 13 466 2623 (Phone)
+31 13 466 3042 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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