Wage Floors, Imperfect Performance Measures, and Optimal Job Design

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may AbstractWe analyze the e¤ects of wage ‡oors on optimal job design in a moral-hazard model with asymmetric tasks and imperfect aggregate performance measurement. Due to cost advantages of specialization, assigning the tasks to di¤erent agents is e¢ cient. A su¢ ciently high wage ‡oor, however, induces the principal to dismiss one agent or to even exclude tasks from the production process. Imperfect performance measurement always lowers pro…t under multitasking, but may increase pro…t under specialization. We further show that variations in the wage ‡oor and the agents'reservation utility have signi…cantly di¤erent e¤ects on welfare and optimal job design. We would like to thank Michael Burda, Guido Friebel, Oliver Gürtler, Manuela Hirsch, Ola Kvaløy, Jörg Oechssler, Andreas Roider, Patrick Schmitz, Wendelin Schnedler as well as three anonymous referees. We are also grateful for helpful comments on an earlier version of this paper at the

Strategic Shirking: A Theoretical Analysis of Multitasking and Specialization

“…Kragl and Schöttner () propose a model in which the firm can either hire two workers (each assigned to one task) or one worker who must handle both tasks. Their focus is on the effect of wage floors on the optimal job design.…”

Strategic Shirking: A Theoretical Analysis of Multitasking and Specialization

“…A number of studies address the impact of multiskilling (e.g., Carmichael and MacLeod, 1993;Owan, 2011) or multitasking (e.g., Itoh, 1994a;Kragl and Schöttner, 2014) on worker incentives. Carmichael and MacLeod argue that multiskilling offers a means of credibly providing insurance to workers against future job loss, thereby improving their incentives to embrace labor-saving technological change.…”

“…Neither Itoh's model nor ours requires technological complementarities to generate multitasking, though Itoh's model requires substitutability in the cost function whereas ours does not. Kragl and Schöttner (2014) propose a model in which the firm can either hire two workers (each assigned to one task) or one worker who must handle both tasks. Their focus is on the effect of wage floors on the optimal job design.…”