James J. Anton
Scandinavian Journal of Economics 94 (3): 425-442, 1992
Abstract: The role of seniority in efficient compensation and employment arrangements between a firm and its labor pool is examined. Seniority is treated as an endogenous factor in a dynamic model with uncertainty. Nonseparability over time in preferences and production emerges as a pivotal aspect of seniority provisions in efficient allocations. The analysis focuses on two dynamic factors that have been emphasized in the literature; nonseparable worker preferences in leisure and a learning-by-doing process of human capital accumulation.