Contract Form, Wage Flexibility, and Employment
基于企业生产率难以衡量和就业需要关系专用性投资两个假设，推导出最优合同形式（固定工资或奖金）对工时和总报酬的不同影响，并用PSID数据验证了理论预测。
We begin with two uncontroversial hypotheses - firm productivity is expensive to measure and employment entails relationship-specific investments. These assumptions imply that firms would optimally choose fixed-wage contracts, and complement these with bonus pay when measuring employee performance is not too costly. These assumptions imply that under an optimal employment contract hours of work is less responsive, while total compensation is more responsive to shocks under bonus-pay contracts compared to fixed wage contracts. Using data from the Panel Study of Income Dynamics (PSID) where shocks are proxied using the local unemployment rate, we find strong support for these two implications.