CONTENTS -- LIST OF FIGURES -- LIST OF TABLES -- 1 Personnel Economics and Non-Competitive Labour Markets -- 1.1 Introduction -- 1.2 The Job in an Imperfect Labour Market -- 1.2.1 Perfect Labour Market -- 1.2.2 Imperfect Labour Market with Wage Set by the Firms -- 1.2.3 Imperfect Labour Market with Surplus Splitting -- 1.2.4 Imperfect Labour Market with Exogenous Wage -- 1.3 Minimum Wage Constraints and Union Density -- 1.4 Employment Protection Legislation -- 2 The Optimal Skill Ratio -- 2.1 Introduction -- 2.2 A General View on Personnel Policies at the Hiring Stage -- 2.3 The Optimal Skill Ratio: Key Concepts -- 2.3.1 Skilled and Unskilled Labour Interdependent (Interior Solution) -- 2.3.2 Skilled and Unskilled Labour Independent (Corner Solution) -- 2.3.3 The Effects of Wage Compression -- 2.3.4 Independent Skilled and Unskilled Labour Interacting with Costly Capital -- Appendix 2.1. A Formal Expression of the General Problem -- 3 The Hours-Employment Trade-Off -- 3.1 Introduction -- 3.2 A Formal Classification of Labour Costs -- 3.2.1 Non-recurring Fixed Costs -- 3.2.2 Recurring Fixed Costs -- 3.2.3 Variable Costs -- 3.3 A Theory of the Hours-Employment Trade-Off -- 3.3.1 The Isocost and the Total Labour Costs -- 3.3.2 A Formal solution to the Employment-Hours Trade-Off -- 3.4 The Overtime Premium and the Effects of Reducing the Workweek -- 3.4.1 Firm Position with the Overtime Premium -- 3.4.2 The Effect of a Reduction in the Normal Workweek -- 3.5 Reducing the Workweek: A Natural Experiment from France -- 3.6 Theoretical Predictions and a Natural Experiment -- 3.7 The Evidence -- Appendix 3.1. A More Formal Version of the Hours-Employment Trade-off -- 4 Temporary or Permanent? -- 4.1 Introduction -- 4.2 Permanent Contracts with Fixed Wages -- 4.2.1 A Numerical Example -- 4.2.2 Formal Derivation -- 4.3 Temporary Contracts as a Buffer Stock.

4.4 The Buffer Stock Model with Interim Costs -- 4.5 Temporary Contracts with Costly Turnover: Costs and Benefits -- 4.6 A Brief Look at the Evidence -- Appendix 4.1. The Formal Derivation of the Buffer Stock Model -- Appendix 4.2. The Formal Derivation of the Buffer Stock Model with Costly Interim Agency -- 5 Managing Adverse Selection in Recruiting -- 5.1 Introduction -- 5.2 Contingent Contracts -- 5.2.1 Piece Rate as a Contingent Contract -- 5.2.2 Temporary Contract with Probation Wage -- 5.2.3 Contingent Contracts with Minimum Wages -- 5.3 Use of Credentials and the Signalling Model of Education -- 5.4 Education Signalling -- 5.5 Education Signalling: A Formal Story -- 5.6 Rules of the Game -- 5.7 No Education Equilibrium (Pooling Equilibrium) -- 5.8 Education Equilibrium (Separating Equilibrium) -- 6 Optimal Compensation Schemes: Foundation -- 6.1 Introduction -- 6.2 A Formal Principal-Agent Model -- 6.2.1 The General Setting -- 6.2.2 The Problem of a Risk-Neutral Agent -- 6.2.3 The Problem of the Principal with a Risk-Neutral Agent -- 6.3 The Basic Scheme with Non-Negative Payments -- 6.4 The Basic Scheme when the Agent is Risk Averse -- 6.4.1 The Agent Preferences -- 6.4.2 The Problems of the Agent -- 6.4.3 The Problem of the Principal with a Risk-Averse Agent: The Optimal Bonus Scheme -- Appendix 6.1. What if the Principal and the Risk-averse Agent Could Contract on Effort -- 7 Pay for Performance with Wage Constraints -- 7.1 Introduction -- 7.2 Heterogeneous Ability: The Set-Up -- 7.3 Fixed Wage with Minimum Output -- 7.4 Pure Rent: Fixed Wage with Minimum Output and Heterogeneous Ability -- 7.4.1 A Numerical Example -- 7.5 Performance Pay with a Two-Tier Wage System -- 7.5.1 The Formal Solution to the Two-Tier Wage System -- 7.5.2 Two-Tier System: An Example -- 7.6 Pay for Performance at Safelite -- 7.6.1 Theoretical Predictions.

7.6.2 Basic Statistics -- 7.6.3 Basic Results -- 7.6.4 Possible Interpretations -- 7.7 Econometrics -- 7.7.1 Other Issues -- Appendix 7.1. The Basic Franchising Scheme With the Ability Parameter -- Appendix 7.2. An Optimal Scheme With a Fixed Wage -- 8 Relative Compensation and Efficiency Wage -- 8.1 Introduction -- 8.2 Tournament: A Formal Story -- 8.2.1 Worker Problem -- 8.2.2 Firm Problem -- 8.2.3 Obtaining the Wages -- 8.2.4 Heterogeneity and Risky Strategies -- 8.3 Linear Performance Evaluation -- 8.3.1 Indirect Evidence of Relative Compensation -- 8.4 Evidence on Tournaments in Broiler Production -- 8.5 Broiler Production -- 8.6 Efficiency Wage -- 8.7 Deferred Compensation and Upward-Sloping Wage Profile -- 9 Training and Human Capital Investment -- 9.1 Introduction -- 9.2 The Basic Human Capital Model of Schooling -- 9.3 General versus Specific Investment -- 9.4 General Training -- 9.4.1 The Basic Set-up -- 9.4.2 The Efficient Level of Training -- 9.4.3 The Solution of the Model -- 9.4.4 Investment in General Training: An Example -- 9.5 Firm-Specific Training -- 9.5.1 Surplus and Specific Rent -- 9.5.2 Rent Sharing -- 9.5.3 Firm-Specific Human Capital: An Example -- 9.6 Some Evidence on Training -- Appendix 9.1. General Training -- Appendix 9.2. Firm-Specific Training -- 10 Training Investment in Imperfect Labour Markets -- 10.1 Introduction -- 10.2 Firm-Sponsored Training: The Baseline Case -- 10.2.1 The Set-up -- 10.2.2 The Solution -- 10.3 A More General Framework -- 10.4 Firm-Sponsored Training in Temporary Help Firms -- 10.4.1 The Evidence: Wages and Training in the THS Industry -- 10.4.2 A Possible Story for the THS Evidence -- 11 Job Destruction -- 11.1 Introduction -- 11.2 Firm-Initiated Separations and Wage Cuts in Imperfect Labour Markets -- 11.2.1 Job Destruction: An Example.

11.2.2 Job-Preserving Wage Cuts with Asymmetric Information -- 11.3 Labour Hoarding and the Effect of Firing Taxes -- 11.4 Job Creation, Job Destruction, and Labour Hoarding -- Appendix 11.1 Present Discounted Values and Multi-period Jobs -- 12 Further Issues in Employment Protection Legislation -- 12.1 Introduction -- 12.2 EPL Taxes and Transfers -- 12.2.1 Calculating Taxes and Transfers -- 12.3 Outsiders, Insiders, and Tax and Transfers -- 12.3.1 Deriving the Wages with Severance Payments -- 12.3.2 Deriving the Wages with the Firing Tax -- 12.4 Threshold Effects -- 12.4.1 The Set-up of the Model -- 12.4.2 The Efficient Allocation -- 12.4.3 The Rigid System -- 12.4.4 The Role of Threshold Effects -- 13 Teams and Group Incentives -- 13.1 Introduction -- 13.2 The Team Production Problem -- 13.3 Team Norms as Remedies to the Team Production Problem -- 13.4 Teams in Reality -- 13.5 A Case Study: Production at Koret -- 13.5.1 The Impact of Teams on Productivity at Koret -- 13.5.2 Who Joins a Team? -- 13.5.3 How Does a Team Composition Affect Team Productivity? -- 13.5.4 Discussion and Conclusion -- Appendix A. Labour Demand at the Firm Level -- Appendix B. Constrained Optimization -- References -- Index -- A -- B -- C -- D -- E -- F -- G -- H -- I -- J -- K -- L -- M -- N -- O -- P -- Q -- R -- S -- T -- U -- V -- W -- Y.