Wages, Hours and Human Capital Over the Life Cycle

Citation

Hart RA & Ma Y (2008) Wages, Hours and Human Capital Over the Life Cycle. Jahrbucher fur Nationalokonomie und Statistik, 228 (5-6), pp. 446-464. http://www.luciusverlag.com/zeitschriften/jahrbuecher/jahrbuecher_inhalt.htm

Abstract
We investigate wage-hours contracts within a four-period rent sharing model that incorporates asymmetric information. Distinctions are made among (a) an investment period, (b) a period in which the parties may separate (quits or layoffs) or continue rent accumulation and sharing, (c) a post investment period and, (d) retirement. We establish that increases in both wage rates and hours of work in the post-investment period serve to minimise sub-optimal separations and, moreover that both wage and hours schedules are concave. Testing is based on 13 waves of British Household Panel Survey from 1991 to 2003.

Keywords
Wage-hours Contracts; Asymmetric Information; Four Period Model; Hours of labor; Human capital; Wages; Overtime

Journal
Jahrbucher fur Nationalokonomie und Statistik: Volume 228, Issue 5-6

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