In this project, I explore the consequences of informal incentives on the motivation and productivity of employees. Moreover, I analyze which factors determine the effectiveness of informal incentives
and which role institutions play in that respect. The studies are based on theoretical models of ?relational contracts? which are used to generate predictions which subsequently are tested empirically. Relational contracts work better with a higher future value of an employment
relationship, which itself is affected by aspects such as growth, interest rates, and generally the perceived stability of employment relationships. The empirical analysis is based on administrative register data which is matched with individual health care data in Upper Austria.
The motivation of employees is proxed by their sick-leave takeup, in particular if the weather is nice. The project approaches three questions: What is the impact of the generosity of unemployment benefits on the motivation of employees? How do employees react to mass layoffs
by the firm they work for? How does a firm?s financing structure interact with their employee?s motivation, and which role do corporate taxes play? Key words: Informal incentives, institutions, worker motivation, administrative data