Just-cause provisions, severance pay, and the efficiency wage hypothesis
2000; Wiley; Volume: 21; Issue: 2 Linguagem: Inglês
10.1002/1099-1468(200003)21
ISSN1099-1468
AutoresHarvey S. James, Derek M. Johnson,
Tópico(s)Employment and Welfare Studies
ResumoA simple model of employment contracting is employed to examine the effectiveness of just-cause provisions in alleviating employer opportunism in two types of efficiency wage contracts—standard contracts, in which wages exceed the worker's marginal contribution, and deferred wages, which are paid after a period of tenure in the firm. It is argued that just-cause employment policies are necessary and sufficient to prevent employer opportunism when standard efficiency wages are utilized. However, just-cause policies are not sufficient to deter employer opportunism when employment contracts are of the delayed-payment type. In these contracts, other contractual provisions, such as severance provisions, are also necessary. Copyright © 2000 John Wiley & Sons, Ltd.
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