The Desire for Impact
Tinbergen Institute Discussion Paper No. TI 2004-115/1
27 Pages Posted: 1 Nov 2004
Date Written: September 2005
This paper explores the meaning and implications of the desire by workers for impact. We find that this impact motive can make firms in a competitive labor market act as monopsonists, lead workers with the same characteristics but at different firms to earn different wages, may alleviate the hold-up problem in firm-specific investment, can make it profitable for an employer to give workers autonomy in effort or task choice, and can propagate shocks to unemployment.
Keywords: Impact, monopsonistic behavior, wage differentials, hold-up problem, contracts, autonomy
JEL Classification: J3, J4, M5
Suggested Citation: Suggested Citation