TY  - JOUR
AU  - Kahn,Shulamit
AU  - Lang,Kevin
TI  - Constraints on the Choice of Work Hours:  Agency vs. Specific-Capital
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 2238
PY  - 1987
Y2  - May 1987
UR  - http://www.nber.org/papers/w2238
L1  - http://www.nber.org/papers/w2238.pdf
N1  - Author contact info:
Shulamit Kahn
Boston University
School of Management
595 Commonwealth Ave.
Boston, MA  02215
Tel: 617-353-4299
Fax: 617-353-6667
E-Mail: skahn@bu.edu

Kevin Lang
Department of Economics
Boston University
270 Bay State Road
Boston, MA  02215
Tel: 617/353-5694
Fax: 617/353-4001
E-Mail: lang@bu.edu
AB  - Most models of implicit lifetime contracts imply that at any particular point in time, workers' wages and value of marginal product (VMP) will diverge. As a result, the contract will have to specify hours as well as wages, since firms will desire to prevent workers from working more when the wage is greater than VMP and from working less when the wage is less than VMP. this divergence, combined with the fact that in efficient contracts, the hours are set so that VMP equals the marginal value of leisure, implies that workers will face binding hours constraints. We show that the two major models of lifetime contracts, the agency model and the firm-specific capital model, make opposite predictions regarding the relation between work hours constraints and job tenure. We test these predictions. Our results indicate that neither model of efficient long-term contracts explains the observed pattern of hours constraints. Therefore, we briefly consider other explanations.
ER  -