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Title:Adjustment of deferred compensation schemes, fairness concerns, and hiring of older workers PDF Logo
Authors:Pfeifer, Christian
Issue Date:2009
Series/Report no.:University of Lüneburg Working Paper Series in Economics 151
Abstract:Hutchens (1986, Journal of Labor Economics 4(4), pp. 439-457) argues that deferred compensation schemes impose fixed-costs to firms and, therefore, they employ older workers but prefer to hire younger workers. This paper shows that deferred compensation can be a recruitment barrier even without these fixed-costs, because adjustments of wage-tenure profiles for older new entrants can lead to adverse incentive effects from a fairness perspective. A personnel data set and a linked employeremployee data set reveal that wage-tenure profiles of white-collar workers are indeed adjusted according to entry age but that firms still hire few older workers.
Subjects:Deferred compensation
entry age
internal labor markets
Document Type:Working Paper
Appears in Collections:Working Paper Series in Economics, Leuphana Universität Lüneburg

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