The bonus share of ̄exible pay in Germany, Japan and the US: Some empirical regularities
نویسندگان
چکیده
Many compensation schemes consist of cash ̄ow streams with different risk characteristics. For example, bonuses, which help align a ®rm's wage bill with business cycle ̄uctuations, are more variable than regular (®xed) pay. We investigate empirical regularities in compensation schemes involving risky pay which is contingent on certain random outcomes. Using data for Germany, Japan and the US, we ®nd that the ratio of bonus pay to total pay increases as worker quali®cations rise. This is consistent with another ®nding that the returns to human capital investment observed for bonus payments are larger than the returns observed for regular pay. # 1998 Elsevier Science B.V. JEL classi®cation: E32; J31; J33
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