Accounting and Finance Seminar - Vladimir Vladimirov (Amsterdam)

23 October 2019, 1.00 PM - 23 October 2019, 2.15 PM

Vladimir Vladimirov

G.15, 15-19 Tyndalls Park Road

Financing Skilled Labor

Abstract 

This paper studies how competition for skilled workers a¤ects how firms structure and finance workers' compensation. Workers' compensation structure has externalities for co-workers and firms, as it affects the risk of subsequent "worker runs" (workers leaving because others are leaving). It results from negotiations in which workers may struggle to compare di¤erent types of compensation o¤ers. If competition for skilled labor empowers workers to dictate terms, workers demand equity-based compensation, effectively, self-financing their compensation. Otherwise, ...firms offer fixed wages that they back by external financing. Both cases entail ineffiencies. The model explains
evidence relating compensation structure to worker bargaining power.

Contact information

http://vladimir-vladimirov.net/

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