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We derive the optimal labor contract for a levered firm in an economy with perfectly competitive capital and labor markets. Employees become entrenched under this contract and so face large human costs of bankruptcy. The firm's optimal capital structure therefore depends on the trade-off between these human costs and the tax benefits of debt. Optimal debt levels consistent with those observed in practice emerge without relying on frictions such as moral hazard or asymmetric information. Consistent with empirical evidence, persistent idiosyncratic differences in leverage across firms also result. In addition, wages should have explanatory power for firm leverage.

Globalisation, the shift from manufacturing to services as a source of employment, and the spread of information-based systems and technologies have given birth to a new economy, which emphasises flexibility in the labour market and in employment relations. These changes have led to the erosion of the standard (industrial) employment relationship and an increase in precarious work - work which is poorly paid and insecure. Women perform a disproportionate amount of precarious work. This collection of original essays by leading scholars on labour law and women's work explores the relationship between precarious work and gender, and evaluates the extent to which the growth and spread of precarious work challenges traditional norms of labour law and conventional forms of legal regulation.The book provides a comparative perspective by furnishing case studies from Australia, Canada, the Netherlands, Quebec, Sweden, the UK, and the US, as well as the international and supranational context through essays that focus on the IMF, the ILO, and the EU. Common themes and concepts thread throughout the essays, which grapple with the legal and public policy challenges posed by women's precarious work.

Although there has been substantial literature on the economic impact of labour legislation in the world, the number of studies related to Vietnam is, surprisingly, very small. Our article provides the first evidence on the link between labour law and various labour market outcomes using the Vietnamese context. We examine how labour supply, earnings and social protection outcomes adjusted to labour contract reform under the 2012 Labour Code. The study uses three waves of the Vietnam Labour Force Survey to examine both medium-term and short-term impacts of the reform. Difference-in-differences and fixed-effect techniques are utilised. Overall, we find that the law change significantly affected hours worked, work absenteeism, monthly allowance and incidence of bonuses among contracted workers. However, the effects on workers' monthly wages, overtime remuneration and other allowances, and the social protection-related outcomes were not clear in the short run.

Based on a survey of 1,268 firms in 12 cities, this article empirically studies unions’ effects on worker welfare in China. Regressions carried out on a rich set of specifications show that unionization is significantly associated with higher hourly wages and larger pension coverage and weakly associated with lower monthly working hours. Further econometric analysis finds that unions promote individual and collective contracts. The effect of collective contracts vanishes when unions are present, whereas individual contracts have independent and positive effects. In addition, unions have effects on workers’ welfare independent of collective and individual contracts.

This paper investigates the causal effect of employment protection on inventor mobility. Taking the enactment of China’s Labor Contract Law in 2008 as a quasi-natural experiment, our difference-in-difference estimate utilizes two-dimensional variations: firm ownership (i.e., SOEs vs. non-SOEs) and year (i.e., before and after 2008). Using combined data on patent applications filed at the State Intellectual Property Office of China and listed manufacturing companies over 2004–2012, we find that the law plays a sizeable positive role in reducing the likelihood of inventor mobility. This effect is more pronounced for firms with higher labor intensity, stricter law enforcement, higher innovation dependence, lower R&D team stability, and inventors that work outside the core of R&D networks. Further, we provide consistent evidence for two plausible mechanisms for the positive effect: limiting the ability of employers to unfairly dismiss inventors and substituting low-skilled workers with inventors. In addition, the law causes firms to obtain more high-quality patents and reduces bankruptcy risk. Overall, our findings shed new light on the economic effects of labor protection in a typical emerging market.

This paper provides the first experimental test of Edward Lazear's (1979) model of deferred compensation. We examine the relationship between firms' wage offers and workers' effort supply in a multiperiod environment. If firms can ex ante commit to a wage schedule with deferred compensation, workers should respond by supplying sufficient effort to avoid dismissal. We contrast this full-commitment case to controls with no commitment and computer-generated wages in order to examine the roles of monetary incentives, social preferences, and reciprocity. Finally, we examine a setup without formal commitment, but where firms can build a reputation for paying deferred wages.

We analyze a large, anonymous labour market in which firms motivate their workers via relational contracts. The market is frictionless and features on-the-job search, in that all acceptable vacancies are immediately filled and the employed compete with the unemployed for vacancies. While firms and workers are ex ante identical, the unique equilibrium exhibits a continuous distribution of contracts in which high wage firms have higher retention rates, more motivated workers and higher productivity. The model thus generates dispersion in wages, productivity and human resource strategies, and gives rise to endogenous job ladders. An exogenous increase in on-the-job search increases the quantity of jobs but decreases their quality; with sufficient on-the-job search there is full employment, and wage dispersion rather than unemployment motivates workers.

One explanation advanced for the persistent gender pay differences in labor markets is that women avoid salary negotiations. By using a natural field experiment that randomizes nearly 2,500 job seekers into jobs that vary important details of the labor contract, we are able to observe both the extent of salary negotiations and the nature of sorting. We find that when there is no explicit statement that wages are negotiable, men are more likely to negotiate for a higher wage, whereas women are more likely to signal their willingness to work for a lower wage. However, when we explicitly mention the possibility that wages are negotiable, these differences disappear completely. In terms of sorting, we find that men, in contrast to women, prefer job environments where the “rules of wage determination” are ambiguous. This leads to the gender gap being much more pronounced in jobs that leave negotiation of wage ambiguous. This paper was accepted by Gérard P. Cachon, behavioral economics.

This study attempts to show the influencing factors that affect the residence intention of the ethnic minority floating population, explores the ways to promote their citizenization, improves the \"quality\" of the new type of urbanization, and achieves communication and integration of all ethnic groups in the city. Results show that the male’s intention is higher than that of the female, a stable marriage relationship is beneficial to the intention to stay in the city, and the Hukou system still exerts a significant influence on the residential intention of the population. Signing a labor contract has a positive impact on the intention to stay in the city, which is stronger among the minority floating population in the province than that of inter-provincial migration population. Social interaction and psychological adaptation further strengthen the intention of the minority floating population to stay in the city. Therefore, in promoting the urbanization of minority floating population, efforts are needed to deepen the household registration system, improve the level of social security and pay more attention to social interaction and psychological adaptation, so as to forge a strong sense of community among the Chinese people.

This paper studies the impact of job contract types on perceived job quality, using the Finnish 2008 Quality of Work Life Surveys (QWLS) from the years 1997, 2003 and 2008. In the analysis, job contract types are adjusted to take into account the motive for doing temporary and part-time work. Our results from the Finnish QWLS imply that there are clear differences in job quality and work well-being by the type of job contract. Our results also show the importance of distinguishing between types of temporary and part-time work by the contract preference, i.e. whether these nonstandard employment arrangements are exercised involuntarily or not. Almost without exception, involuntary temporary and involuntary part-time workers' experiences of their job quality are weaker with respect to core job quality indicators studied in this paper, such as training possibilities, participation in employer-funded training, career possibilities, possibilities to learn and grow at work, job insecurity, and job autonomy.