Template-Type: ReDIF-Paper 1.0
Title: Workplace surveillance, privacy protection, and
efficiency wages
Author-Name: Patrick W. Schmitz
Author-Email: 
Classification-JEL: K31; J83
Keywords: Privacy protection laws; workplace surveillance; moral hazard
Abstract: Consider an employer who wants her employee to work hard.
	As is well known from the e.ciency wage literature, the employer must pay
	the (wealth-constrained) employee a positive rent to provide incentives for
	exerting unobservable e.ort. Alternatively, the employer could make effort
	observable by costly workplace surveillance. It is argued that a privacy
	protection law preventing surveillance may increase the total surplus. While
	such a law reduces the employer’s profit, this loss can be overcompensated
	by the employee’s gain, because the employer invests in surveillance not only
	to implement higher effort, but also to reduce the employee’s rent.
Note: 
Length: 19
Creation-Date: 2005-09
Revision-Date: 
File-URL: http://www.wiwi.uni-bonn.de/bgsepapers/bonedp/bgse25_2005.pdf
File-Format: application/pdf
Handle: RePEc:bon:bonedp:bgse25_2005