scholarly journals Unobserved Ability, Efficiency Wages, and Interindustry Wage Differentials

10.3386/w3857 ◽  
1991 ◽  
Author(s):  
McKinley Blackburn ◽  
David Neumark
Keyword(s):  
Wage Differentials ◽  
Efficiency Wages ◽  
Unobserved Ability

scholarly journals Efficiency Wages in Pakistan's Small Scale Manufacturing

1999 ◽  
Vol 4 (1) ◽  
pp. 1-23
Author(s):  
Abid A. Burki
Keyword(s):  
Wage Differentials ◽  
Wage Gap ◽  
Sample Selection ◽  
Manufacturing Firms ◽  
Efficiency Wages ◽  
Sample Selection Bias ◽  
Small Scale ◽  
Efficiency Wage ◽  
Market Clearing ◽  
Using Data

This paper investigates wage differentials between workers in subcontracting and non-subcontracting firms, using data from a recent survey of small manufacturing firms in Gujranwala, Pakistan. The paper finds that subcontracting workers receive a high wage premium and invokes efficiency wage arguments to explain this differential. The paper argues that due to a client/vendor monitoring problem it is optimal for subcontracting firms to pay higher than the market clearing wages. The use of Heckman's two stage procedure to test for sample selection bias fails to give such evidence. A decomposition of the wage differentials indicates that endowment differentials partly explain higher wages for subcontracting workers while the bulk of this wage gap is explained by differential returns to workers' attributes.

scholarly journals A study on the trade-off between supervision and wages: an empirical test of efficiency wage theory

2005 ◽  
Author(s):  
◽  
Min-Hong Oh
Keyword(s):  
Service Sector ◽  
Wage Differentials ◽  
Interaction Analysis ◽  
Empirical Test ◽  
Negative Relationship ◽  
Wage Structure ◽  
Efficiency Wages ◽  
Efficiency Wage ◽  
Wage Theory ◽  
Using Data

This dissertation investigates the applicability of the shirking version of efficiency wage models in Korea. Analyses is based on the Survey on Wage Structure in the 1980's and 1990's - using data collected in 1983, 1989, 1993, 1996, and 1999. Efficiency wage theory predicts a negative relationship between supervision and wages: employers may choose either to pay a wage premium or to increase the level of supervisory intensity to force workers to exert more effort. The relation between supervisory intensity, as measured by the ratio of supervisors to supervisees in a firm, and wages is explored. Interaction effects between supervisory intensity and employer characteristics on wages are also investigated in more detailed analyses. Finally, we explore whether supervisory intensity is able to explain inter-industry wage differentials. The evidence suggests that supervisory intensity is positively correlated with wages, implying the efficiency wage model is not applicable in Korea. Industrial interaction analysis shows weak evidence of efficiency wages in the social service sector, but there are no apparent patterns in other industries. In occupational interaction analysis, efficiency wages are paid to drivers and sales workers. Although supervisory intensity does not explain wage variation across industries, there are significant inter-industry wage differentials observed in Korea.

scholarly journals Inter-Industry Wage Differentials and Unobserved Ability: Siblings Evidence from Five Countries

2004 ◽  
Author(s):  
Anders Bjorklund ◽  
Bernt Bratsberg ◽  
Tor Eriksson ◽  
Markus Jantti ◽  
Oddbjørn Raaum
Keyword(s):  
Wage Differentials ◽  
Unobserved Ability
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