Personnel economics has revolutionized the teaching of human resources in business schools worldwide. Edward Lazear is a founding father of personnel economics and this volume brings together his key papers on the institutions and incentives that shape interactions between employees and employers.

Professor Lazear taught previously at the University of Chicago's Graduate School of Business, where he was the Brown Professor of Urban and Labor Economics. Lazear served as Chairman of the President's Council of Economic Advisers and was at the White House from 2006 to 2009. Founding Editor of the Journal of Labor Economics, Lazear is a Fellow of the American Academy of Arts and Sciences and of the Econometric Society, and a Research Associate of the National Bureau of Economic Research. He is the former President of the Society of Labor Economists. Professor Lazear has written extensively on labor markets and personnel issues. He has over 100 published articles and eleven books. His book Personnel Economics (MIT Press, 1995) received the Melamed Prize in 1998. In June 2006, Lazear was awarded the Jacob Mincer Prize given by the Society of Labor Economics for lifetime contributions to the field.

• I: Introduction by the Editors: Edward P. Lazear: A Founding Father of Personnel Economics


• II: What Is Personnel Economics?


• III: Explaining Labor Institutions in Business


• Introduction


• 1: Why Is There Mandatory Retirement?


• 2: Pensions as Severance Pay


• 3: Job Security Provisions and Employment


• 4: An Economic Analysis of Works Councils


• 5: The Peter Principle: A Theory of Decline


• IV Compensation Structures


• Introduction


• 6: Rank-Order Tournaments as Optimum Labor Contracts


• 7: Salaries and Piece Rates


• 8: Performance Pay and Productivity


• 9: The Job as a Concept


• V Social Interactions and Personnel Economics


• Introduction


• 10: Peer Pressure and Partnerships


• 11: Pay Equality and Industrial Politics


• 12: Culture and Language


• VI: Skill Acquisition and Personnel Economics


• Introduction


• 13: Firm-Specific Human Capital: A Skill-Weights Approach


• 14: Educational Production


• 15: Speeding, Terrorism, and Teaching to the Test


• 16: Entrepreneurship


• VII: Personnel Economics - The Past and Future