Employers' Wage Flexibility Leads to Lower Effort and Temporary Employment Trends.
Employers in a fluctuating job market offer contracts with fixed wages, revenue sharing, and employment duration. The study investigates if fixed wages can only increase or also decrease in ongoing employment. Uncertainty and less wage flexibility may lead to temporary jobs, but employers tend to maintain ongoing employment. Giving more wage flexibility can lead to opportunistic wage cuts by employers, resulting in lower employee efforts.