This article considers the implications of allowing a manager discretion over task assignment. If employees earn rents from carrying out tasks, and the manager cannot "sell" the jobs to her subordinates, she has an incentive to take on more tasks than is optimal and delegate too few to a subordinate. I show that although firms can alleviate this incentive by offering output-contingent contracts, even with the optimal contract, (i) the manager carries out too many tasks, (ii) she exerts too much effort on her own tasks, and (iii) her subordinate exerts too little effort on his tasks.

"This article uses the 1970, 1980, and 1990 Public Use Samples of the U.S. census to document what happened to immigrant earnings in the 1980s and to determine if pre-1980 immigrant flows reached earnings parity with natives. The relative entry wage of successive immigrant cohorts declined by 9% in the 1970s and by an additional 6% in the 1980s. Although the relative wage of immigrants grows by 10% during the first 2 decades after arrival, recent immigrants will earn 15%-20% less than natives throughout much of their working lives."

Using National Longitudinal Survey of Youth data on tenure and wages, this article analyzes the extent to which the level of job mismatching varies over the business cycle and how it is dealt with by the labor market. I find significant cyclical variation in job match quality and an internalization of the variation by the labor market through wages. Mismatching occurs more during recessions but is primarily captured in starting wages. The evidence suggests the cyclical phenomenon is one of general mismatching rather than an increased number of stopgap jobs during recessions.

The "efficiency wage hypothesis" offers an explanation for employment rents. According to this hypothesis, firms pay wages above the opportunity cost of labor to elicit productivity or quality-enhancing behaviors from employees. Firms pursue this strategy when alternative incentive schemes are unavailable or too costly. Thus, firms will not pay premium wages when employees post sufficiently large performance bonds. This article examines employment rents in a setting where employees post sizable performance bonds-large law firms. Contrary to the efficiency wage hypothesis, we find that associates in these large firms post substantial performance bonds while also receiving substantial, ex ante rents.