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American Economic Review: Vol. 102 No. 2 (April 2012)

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Screening, Competition, and Job Design: Economic Origins of Good Jobs

Article Citation

Bartling, Björn, Ernst Fehr, and Klaus M. Schmidt. 2012. "Screening, Competition, and Job Design: Economic Origins of Good Jobs." American Economic Review, 102(2): 834-64.

DOI: 10.1257/aer.102.2.834

Abstract

High-performance work systems give workers more discretion, thereby increasing effort productivity but also shirking opportunities. We show experimentally that screening for work attitude and labor market competition are causal determinants of the viability of high-performance work systems, and we identify the complementarities between discretion, rent-sharing, and screening that render them profitable. Two fundamentally distinct job designs emerge endogenously in our experiments: "bad" jobs with low discretion, low wages, and little rent-sharing, and "good" jobs with high discretion, high wages, and substantial rent-sharing. Good jobs are profitable only if employees can be screened, and labor market competition fosters their dissemination. (JEL D12, D82, J24, J31, J41, M12, M54)

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Authors

Bartling, Björn (U Zurich)
Fehr, Ernst (U Zurich)
Schmidt, Klaus M. (U Munich)

JEL Classifications

D12: Consumer Economics: Empirical Analysis
D82: Asymmetric and Private Information
J24: Human Capital; Skills; Occupational Choice; Labor Productivity
J31: Wage Level and Structure; Wage Differentials
J41: Labor Contracts
M12: Personnel Management; Executive Compensation
M54: Personnel Economics: Labor Management


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