Employment Profitability Research Articles

Pareto Gains from Limiting Compensation Options

Abstract We examine the effects of a single payment structure policy (SPP) that prevents an employer from offering an employee a choice among compensation structures. An SPP reduces the employer's profit and increases the employee's welfare when the employee's (privately known) ability is exogenous. In contrast, an SPP can increase both the employer's profit and the employee's welfare when the employee's ability is endogenous. An SPP secures these Pareto gains by restricting the employer's ability to limit the rent the employee earns from high ability, thereby inducing the employee to increase his human capital investment.

Pensions in Australia and South Korea: A comparative analysis

This article compares the social contexts and institutional arrangements of pensions in South Korea and Australia. South Korea and Australia are experiencing demographic changes, prompting the reform of pension arrangements and pension accounting. South Korea is currently undergoing major changes as its pension system is restructured, while Australia's pension arrangements continue to evolve but the accounting for these arrangements has lagged pension developments. The visibility of pensions increased in Australia with the convergence of local accounting standards with international financial reporting standards (IFRS) in 2005. When South Korea adopts IFRS between 2009–2011, the costs of the pension promise and the effect on the employer's profit and loss and balance sheet will be more transparent to stakeholders.

Workplace surveillance, privacy protection, and efficiency wages

Consider an employer who wants her employee to work hard. As is well known from the efficiency wage literature, the employer must pay the (wealth-constrained) employee a positive rent to provide incentives for exerting unobservable effort. Alternatively, the employer could make effort observable by costly workplace surveillance. It is argued that a privacy protection law preventing surveillance may increase the total surplus. While such a law reduces the employer's profit, this loss can be overcompensated by the employee's gain, because the employer invests in surveillance not only to implement higher effort, but also to reduce the employee's rent.

Workplace Surveillance, Privacy Protection, and Efficiency Wages

Consider an employer who wants her employee to work hard. As is well known from the efficiency wage literature, the employer must pay the (wealth-constrained) employee a positive rent to provide incentives for exerting unobservable effort. Alternatively, the employer could make effort observable by costly workplace surveillance. It is argued that a privacy protection law preventing surveillance may increase the total surplus. While such a law reduces the employer's profit, this loss can be overcompensated by the employee's gain, because the employer invests in surveillance not only to implement higher effort, but also to reduce the employee's rent.

'Lives of Misery and Melancholy': The Rhetoric and Reality of Industrial Reform in Post-World War I Western Australia

At the close of World War I, there was much talk among governments and employers in Australia and Britain of improving conditions for the workers, and especially those who were returned servicemen. While wage and housing reforms undoubtedly improved living standards for some working people and their families, those scarcely gaining any benefit from such agreements included 'casual' labourers such as waterside workers, and rural labourers. The rhetoric rarely extended to the urgent need to improve health and safety standards and to provide adequately for ill or injured workers. The paper examines the issues of workers' compensation, industrial health and safety, and living conditions, through the use of two case studies: an accident which occurred to a waterside worker on the Fremantle Wharf in 1919, and its ramifications for workers' compensation legislation, and the appalling living and working conditions of timber workers in the south-western jarrah forests in the early 1920s, which were partially redressed through the Timber Industry Regulation Act of 1926. These two cases have been chosen because they highlight serious d?ficiences in early twentieth century industrial reform. The paper also examines the relevant government legislation which was enacted to provide workers' compensation, and to ensure improved health and safety conditions. The impact of such legislation is discussed in the two cases outlined above. The paper concludes that, where safer working conditions and more adequate provision for injured workers meant that the employer's profit margin was narrowed, legislative change was difficult to achieve and any legal loop-holes were exploited.