Unformatted text preview: How do you think flexible benefit packages would affect an employee’s choice between higher wages and more benefits? In this case, higher wage is correlated with less benefits, other things being equal. Now that the flexible benefits packages are introduced, an employee will enjoy more freedom in choosing his/her own package, and therefore, increase the total utility. However, the increased management cost will be transferred to their earnings. So we would expect an reduced wage rate and benefit amount with flexible benefits packages....
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- Spring '10
- Economics, Employee Benefit, Employment compensation, Retirement pay, flexible benefits packages