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)
hdl.handle.net/1765/6612
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 http://hdl.handle.net/1765/6612