TY  - BOOK
AU  - Akerlof,George A.
AU  - Katz,Lawrence F.
ED  - National Bureau of Economic Research.
TI  - Workers' Trust Funds and the Logic of Wage Profiles
T2  - NBER working paper series
PY  - 1988///
CY  - Cambridge, Mass.
PB  - National Bureau of Economic Research
N1  - March 1988; Hardcopy version available to institutional subscribers
N2  - This paper defines a concept, a worker's trust fund, which is useful in analyzing optimal age-earnings profiles. The trust fund represents what a worker loses if dismissed from a job for shirking. In considering whether to work or shirk, a worker weighs the potential loss due to forfeiture of the trust fund if caught shirking against the benefits from reduced effort. This concept is used to show that the implicit bonding in upward sloping age-earnings profiles is not a perfect substitute for an explicit upfront performance bond (or employment fee). It is also shown that the second-best optimal earnings profile in the absence of an upfront employment fee pays total compensation in excess of market clearing in a variety of stylized cases
UR  - https://www.nber.org/papers/w2548
UR  - http://dx.doi.org/10.3386/w2548
ER  -