ABSTRACT
This chapter analyzes the relationship between employers and employees. We begin with the process of search, and then move on to consider several types of employment relationship parallel to those used to discuss marital matches in Chapter 3—spot markets, contingent-claims contracts, and implicit contracts. We argue that, among the three types of relationship, the view of employment as an implicit contract is the most accurate, and such contracts often involve internal labor markets. Following this, we turn to the contributions of sociology, focusing on how individuals are allocated to positions, and how rewards attach to these positions. Central ideas here are the notions of feedback from employment to household behavior, and the segmentation of labor markets and the economy. Throughout the chapter we focus alternatively on aspects of employment as viewed by both sociologists and economists, but we conclude by sketching a single integrated treatment incorporating features of each disciplinary perspective.
