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The agency framework predicts a strong positive relationship between executive effort, pay and firm performance. We study how changes in Norwegian payroll tax legislation and earnings tax (which influenceCEOs' return on effort), affect firm performance and executive earnings for over 11,800 firms. Both reduced payroll tax and reduced marginal earnings tax increase firm performance measured by firms' operating margins. In the latter case total pay increases, but contingent on the return on firm performance, the fixed wage drops. The sensitivity of the remuneration scheme to the earnings tax depends onCEOproductivity and effort costs.

Using representative register and questionnaire data on Norwegian firms and workplaces we study the relationship between firm performance, CEO compensation schemes and the level of executive compensation. On average no relationship is found between executive performance pay and firm productivity. These relationships vary between industries, and CEO performance pay is strongly associated with high‐productivity manufacturing firms. On average CEOs receive higher earnings under performance pay than under fixed pay, even controlled for productivity and industry differences. Thus the earnings of executives appear more strongly related to the choice of executive remuneration scheme than that of the performance of firms.

In this study, Norwegian linked employer–employee panel data covering 1994–96 are used to estimate workers' marginal willingness to pay (MWP) for safety, thus providing unique comparisons between estimates of MWPs from hedonic wage, quit and job duration models. Hedonic wage regressions show that higher injury hazards imply higher wages. Quit and duration regressions show that higher injury hazards imply higher job exit probabilities, while higher wages reduce the job exit probabilities. Differences in the estimated MWP figures indicate that search frictions cause sizeable bias in MWP figures from hedonic wage models, and that MWP issues should be addressed from a dynamic perspective.

We analyse the impact of establishment of governmental sector jobs on private sector employment based on Norwegian population-wide administrative-register data. Based on precise geographical information on the location of jobs, differential treatment intensities yield identification of causal effects. The results suggest that governmental employment has positive effects on private sector employment in the close proximity of the stimulus area. In the same area, we also observe positive short-term effects on wage growth and on firms' sales. Over time, only employment effects prevail. Two different types of placebo tests give support to the causal interpretation of the main results.

Higher replacement rates often imply higher levels of absenteeism, yet even in generous welfare economies, private sick pay is provided in addition to the public sick pay. Why? Using comparative workplace data for the UK and Norway we show that the higher level of absenteeism in Norway compared to UK is related to the threshold in the Norwegian public sick pay legislation. This threshold's importance is confirmed in a Regression Kinked Design (RKD) analysis on the Norwegian micro-data. Private sick pay is provided as an employer-provided non-wage benefit and when training costs are high.