Journal of Economic Perspectives: Vol. 3 No. 4 (Fall 1989)


Quick Tools:

Print Article Summary
Export Citation
Sign up for Email Alerts Follow us on Twitter


JEP - All Issues

Self-Enforcing Contracts, Shirking, and Life Cycle Incentives

Article Citation

Carmichael, H Lorne. 1989. "Self-Enforcing Contracts, Shirking, and Life Cycle Incentives." Journal of Economic Perspectives, 3(4): 65-83.

DOI: 10.1257/jep.3.4.65


The labor market is a rich and complicated place. When a worker takes a job he expects to earn a wage, but will also care about rates of wage growth, fringe benefits, levels of risk, retirement practices, pensions, promotion and layoff rules, seniority rights, and grievance procedures. In return, the worker must give up some time, but he is also asked to upgrade his skills, train other workers, provide effort and ideas, and defer to authority in questions of how his time is spent. Great changes are occurring in the way labor market institutions such as these are modeled. Central to the new approach is the concept of a self-enforcing implicit contract. The focus of this essay is on developments in the theory of self-enforcing contracts, and how these can be used to derive predictions about labor market institutions.

Article Full-Text Access

Full-text Article (Complimentary)


Carmichael, H. Lorne (Queen's U)

JEL Classifications

821: Labor Economics: Theory and Empirical Studies Illustrating Theory
824: Labor Market Studies, Wages, Employment--General


View Comments on This Article (0) | Login to post a comment

Journal of Economic Perspectives

Quick Tools:

Sign up for Email Alerts

Follow us on Twitter

Subscription Information
(Institutional Administrator Access)


JEP - All Issues

Virtual Field Journals

AEA Member Login:

AEAweb | AEA Journals | Contact Us