Employee Crime and the Monitoring Puzzle

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Employee Crime and the Monitoring Puzzle

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Title: Employee Crime and the Monitoring Puzzle
Author: Dickens, William T.; Katz, Lawrence F.; Lang, Kevin; Summers, Lawrence H.

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Citation: Dickens, William T., Lawrence F. Katz, Kevin Lang, and Lawrence H. Summers. 1989. Employee crime and the monitoring puzzle. Journal of Labor Economics 7(3): 331-347.
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Abstract: The simplest economic theories of crime predict that profit-maximizing firms should follow strategies of minimal monitoring with large penalties for employee crime. We investigate possible reasons why firms actually spend considerable resources trying to detect employee malfeasance. We find that the most plausible explanations for firms' large outlays on monitoring of employees-legal restrictions on penalty clauses in contracts and the adverse impact of harsh punishment schemes on worker morale-are also consistent with the payment of premium (rent-generating) wages by cost-minimizing firms.
Published Version: http://dx.doi.org/10.1086/298211
Terms of Use: This article is made available under the terms and conditions applicable to Other Posted Material, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#LAA
Citable link to this page: http://nrs.harvard.edu/urn-3:HUL.InstRepos:3645199
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