How should firms select their employees? How should they design their compensation schemes such that employees are motivated to work hard? How do the performance and compensation of teammates influence workers' motivation and productivity?
Personnel economics examines human resource practices and answers questions that are of paramount importance for business leaders around the globe. In this volume, Edward P. Lazear, a founding father of personnel economics and winner of the IZA Prize in Labor Economics 2004, takes stock of the economic analysis of personnel management, and the advancements and achievements that have been made in this field over the past 30 years. The book contains an impressive selection of Lazear's most important papers. It provides a unifying approach to human resource practices and a useful reference on personnel strategies such as hiring, motivating, and training an effective work force.

• 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

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.