This paper explores the meaning and implications of the desire by workers for impact. We find that this impact motive can make firms in a competitive labor market act as monopsonists, lead workers with the same characteristics but at different firms to earn different wages, may alleviate the hold-up problem in firm-specific investment, can make it profitable for an employer to give workers autonomy in effort or task choice, and can propagate shocks to unemployment.

autonomy, contracts, hold-up problem, impact, monopsonistic behavior, wage differentials
Wages, Compensation, and Labor Costs (jel J3), Particular Labor Markets (jel J4), Personnel Economics (jel M5)
Tinbergen Institute Discussion Paper Series
Tinbergen Institute

Dur, A.J. (2004). The Desire for Impact (No. TI 04-115/1). Tinbergen Institute Discussion Paper Series. Retrieved from