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Topic: Efficiency wage hypothesis


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  Wage   (Site not responding. Last check: 2007-11-05)
Living wage Living wage refers to the hourly wage deemed necessary for a person to achieve a basic standard of living.
Riders of the Purple Wage Riders of the Purple Wage was a Anne McCaffrey.
Wage slavery Wage slavery is a term expressing disapproval of a condition where a person feels compelled to labor in ord...
www.brainyencyclopedia.com /topics/wage.html   (179 words)

  
 Efficiency wages - Wikipedia, the free encyclopedia
In labor economics, the efficiency wage hypothesis argues that wages, at least in some markets, are determined by more than simply supply and demand.
Lazear (1979, 1981) demonstrates the use of seniority wages to solve the incentive problem, where initially workers are paid less than their marginal productivity, and as they work effectively over time within the firm, earnings increase until they exceed marginal productivity.
Ford’s decision to increase wages so dramatically (doubling for most workers) is most plausibly portrayed as the consequence of efficiency wage considerations, with the structure being consistent, evidence of substantial queues for Ford jobs, and significant increases in productivity and profits at Ford.
en.wikipedia.org /wiki/Efficiency_wages   (3147 words)

  
 Efficiency   (Site not responding. Last check: 2007-11-05)
Efficiency Efficiency is a term used with widely variant meanings in different disciplines.
The efficiency of an statistic T is defined as Although e is in general a function...
The energy efficiency of a process is defined as: where W is the a...
www.brainyencyclopedia.com /topics/efficiency.html   (301 words)

  
 George Akerlof - Wikipedia, the free encyclopedia
Akerlof is perhaps best known for his article, " The Market for Lemons : Quality Uncertainty and the Market Mechanism", published in Quarterly Journal of Economics in 1970, in which he identified the severe problems that may afflict markets characterized by asymmetrical information.
In Efficiency Wage Models of the Labor Market, Akerlof and coauthor Janet Yellen propose rationales for the efficiency wage hypothesis in which employers pay above the market-clearing wage, in contradiction to the conclusions of neoclassical economics.
Akerlof received his Bachelor's degree from Yale University in 1962, and his Ph.D. from MIT in 1966 and has taught at London School of Economics.
en.wikipedia.org /wiki/George_A._Akerlof   (226 words)

  
 Monthly Labor Review: Wage differentials associated with flextime - Statistical Data Included
In addition to estimating aggregate wage effects by gender in each year, the article estimates the flextime wage differential associated with specific reasons each worker reportedly preferred flextime in 1989.
The size of the flextime wage differential for women is stable across the years 1989 and 1997 and is similar to the 1997 estimate for men.
Both the compensating wage differential theory and the efficiency wage hypothesis predict that wage rates are affected by pecuniary and nonpecuniary attributes.
www.findarticles.com /p/articles/mi_m1153/is_3_124/ai_75434903   (1141 words)

  
 RePEc   (Site not responding. Last check: 2007-11-05)
Abstract: This paper investigates the efficiency wage hypothesis and derives a tractable expression for the profit loss incurred by deviations from the efficiency wage.
The resulting profit loss shown to depend upon the curvature of th effort function and the employment and wage elasticities of output.
This is consistent with positive effort returns to increasing the wage beyond its efficient level.
www.inomics.com /cgi/repec?handle=RePEc:cep:stidep:10   (131 words)

  
 Higher wages lead to more efficient service provision -- EPI Issue Guide
The central focus is whether and to what extent the introduction of a living wage ordinance in a locality would be expected to either reduce the competitiveness of the contracting process or introduce economic distortions into the local economy.
Interestingly, research on existing living wage ordinances in various cities shows that the number of workers affected tends to be quite small, either in absolute numbers or as a share of the workforce.
Second, since the living wage is likely to affect a small share of the workforce (typically less than 1%), and to represent a small share of affected firms production costs (typically less than 2%), it is not credible to argue that the policy will distort a municipality's economy.
www.epinet.org /content.cfm/issueguides_livingwage_alexlivwg   (2791 words)

  
 [No title]   (Site not responding. Last check: 2007-11-05)
Moreover, in case that these wage differentials are taken as an indication of job rents, there is even less evidence regarding the mechanism which causes the rents.
The experimental evidence shows a stable pattern of wage differentials: the higher the profits of a firm from the employment of a worker, the higher are its wage offers.
Moreover, in case that these wages differentials are taked as an indication of job rents, the evidence regarding the mechanism which causes the rents is even worse.
www.york.ac.uk /inst/exec/biblio/new/newf.bib   (3398 words)

  
 Department of Economics - University of Kent
We use daily data to test econometrically, first, whether the official and free markets are efficient, in the sense that one cannot use exchange rate movements denominated in one currency to predict movements in another currency, and second, whether movements in the free-market rate "cause" movements in the official rate.
The efficiency wage hypothesis is tested by using one of the recently developed methods to measure technical efficiency.
Wage dispersion falls dramatically just after the implementation of economic reforms and we find evidence that the wage structure is under transition after the changes.
www.kent.ac.uk /economics/papers/papers98.html   (3164 words)

  
 Wage Dispersion and Productive Efficiency: Evidence For Sweden*   (Site not responding. Last check: 2007-11-05)
Equality of wage distribution was a vital union goal, and wage dispersion data indicate that during this era of centralized "solidarity" bargaining LO succeeded in obtaining large changes in the structure of relative wages
At the inequality trough in 1983, the Swedish hourly wage distribution was so dense that a relative wage increase of only around 30 percent was enough to carry a worker from the lowest decile of the blue-collar distribution all the way to the highest.
The concept of a centrally coordinated, "solidarity" wage policy in Sweden evidently was first voiced at the 1936 LO congress by the Metal-workers union as a mechanism for leveling wages across the entire labor force in order to make feasible wage equalization within their own industry.
www.usemb.se /Publications/jobcreation/hibbs.htm   (6387 words)

  
 Articles - Minimum wage   (Site not responding. Last check: 2007-11-05)
The traditional view that minimum wages have significant negative effects on employment is straightforward if one assumes that labor markets for low-skill workers can be characterized as fitting the model of a perfectly competitive market, where the only role of wages is as a cost.
Some say that if developing countries had minimum wages, or minimum wages commensurate of those of developed countries, that jobs would not be exported to these poor individuals and their opportunity for economic advancement would be impeded.
If they exist, it is clear that some of the adverse effects can only occur when minimum wages are implemented and successfully enforced by government fiat: either these effects are a consequence of the cost of wage regulation or they do not exist.
www.kamero.net /articles/Minimum_wage?mySession=ca169985a4a33bbf58a6911aa36d6109   (2912 words)

  
 Stumbling and Mumbling: Inequality and over-education
First, there’ll be a wage premium for skilled jobs partly because the wages of unskilled jobs will simply be bid down by competition from educated workers.
Efficiency wage considerations will prevent the wages of skilled jobs from falling.
The wage premium will therefore rise, and there’ll be over-supply of educated workers.
stumblingandmumbling.typepad.com /stumbling_and_mumbling/2005/03/inequality_and_.html   (724 words)

  
 Challenge: Toward an efficiency week - correlation between shorter workweek and higher productivity
If a firm were to hire a worker for the going wage rate or less, it would be in the interest of that worker to shirk because similar employment could be easily obtained.
Firms may also offer wages in excess of the market-clearing rate in an effort to reduce labor turnover For reasons similar to those of the reduced-shirking argument, workers will be more reluctant to quit the higher the relative wage paid by the current employer and the higher the aggregate unemployment rate.
First, just as a higher wage may afford a worker the finance to invest in human "capital" or "physical maintenance" (i.e., nutrition, health, and general or specific training), reduced work hours afford that worker the time to make that investment.
www.findarticles.com /p/articles/mi_m1093/is_1_42/ai_53697784   (1488 words)

  
 Bambooweb: Minimum wage
Increasing unemployment for low-wage earners: it is argued that a higher wage cost per individual reduces the number of workers that may be employed.
Raising employment barriers for people with little or no work experience or formal education: if a worker's labor is not worth the minimum, he may not find employment at all.
Critics of this research, however, argue that their research was flawed., For example, Card and Krueger gathered their data by telephoning employers in California and New Jersey, asking them whether they intended to increase, decrease, or or make no change in their employment.
www.bambooweb.com /articles/m/i/Minimum_wage.html   (2012 words)

  
 Amazon.ca: Books: Efficiency Wage Models of the Labor Market   (Site not responding. Last check: 2007-11-05)
Efficiency Wage Models of the Labor Market explores the reasons why there are labor market equilibria with employers preferring to pay wages in excess of the market-clearing wage and thereby explains involuntary unemployment.
This volume brings together a number of the important articles on efficiency wage theory.
The collection is preceded by a strong, integrative introduction, written by the editors, in which the hypothesis is set out and the variations, as described in subsequent chapters, are discussed.
www.amazon.ca /exec/obidos/ASIN/0521312841   (271 words)

  
 The Centre for the Study of African Economies Working Paper Series
ABSTRACT: Tests for the efficiency wage hypothesis have proposed to use production functions to ask if wage increases can pay for themselves.
Evidence is presented for the Ghana manufacturing sector which allows a test discriminating between the two hypotheses to be conducted.
Francis Teal, " Efficiency wages and rent sharing: a note and some empirical findings " (December 3, 1995).
www.bepress.com /csae/paper34   (143 words)

  
 Indonesia Case Study
According to the WSJ article about Nike and Reebok plants, the 1997 minimum wage in Indonesia was about $2.50 at market rates or $11 per day in purchasing power parity (ppp) dollars ($2.50*4.3).
The workers said the company had failed to pay the new government-mandated minimum wage of $2.50 a day, which took effect April "They are ignoring the rights of the workers to get a decent salary," said Jusuf Makatita, a local union leader.
The employees are demanding higher wages, a safer working environment, more holidays and an annual bonus for Vietnam's lunar new year.
www.gdsnet.org /classes/Indonesia_Case2.htm   (7390 words)

  
 Evidence   (Site not responding. Last check: 2007-11-05)
We have little direct evidence on the efficiency wage hypothesis, but there is a good deal of evidence on related issues.
Presumably they are benefiting from a large productivity effect, although money wages may not be the main reason for it -- because of their difficulties raising investment capital, their wages are not necessarily high.
In Germany all of the large corporations are required to have half of the members of their Boards of Directors elected by the employees.
william-king.www.drexel.edu /top/prin/txt/factors/crits5.html   (471 words)

  
 Final Exam: Econ 502 Fall 2001 (Tesfatsion)
Each consumer has the same exogenously given endowment L* of labor services for period T, measured in person-hours, and every unit of labor is like every other unit.
Then the dollar profits PROFX and PROFY of firms FX and FY in period T are given by PROFX = P_xQ_x - WL_x PROFY = P_yQ_y - WL_y The firms are owned by the consumers, and all profits earned by these firms are returned back to the consumers in the form of dividend payments.
PART A: [10 Points Total] (1) [5 Points] Provide a carefully labeled diagram that depicts for economy E in period T the flow of goods and services together with the flow of price, wage, and dividend payments under the standard Walrasian economy assumptions.
www.econ.iastate.edu /classes/econ502/tesfatsion/502fef01.htm   (995 words)

  
 Husreferenser
Björklund, A., 1986, "Assessing the decline of wage dispersion in Sweden", in IUI Yearbook 1986-87, Industriens Utredningsinstitut, Stockholm 4.
English translation: "Wage Differentials and the Demand for Education in Sweden", Studies of Higher Education and Research 1992:4, Council for Studies of Higher Education, Stockholm.
Klevmarken, N.A., 1993, "Wage Rate Mobility and Measurement Errors: An Application to Swedish Panel Data", in Industrial Concentration and Economic Inequality: Essays in Honour of Peter Hart, edited by M. Casson and J. Creedy, Edward Elgar Publishing Ltd. 52.
www.handels.gu.se /econ/econometrics/hus/referen/husref.htm   (2840 words)

  
 Evidence of Efficiency Wage Payments in UK Firm Level Panel Data
They model the vertical spillovers from wage determination in an upstream labor market to market share performance in a downstream product market and vice versa.
Rent sharing due to efficiency wages is shown to create a unique downstream vertical spillover, while rent sharing due to wage bargaining creates a two-way vertical spillover.
Using U.K. firm level panel data, the authors show that downstream spillovers due to efficiency wage payments and union activity exist and constitute general direct evidence of efficiency wage payments in U.K. companies.
ideas.repec.org /a/ecj/econjl/v104y1994i424p542-55.html   (550 words)

  
 Selected Publications of Faculty   (Site not responding. Last check: 2007-11-05)
“An Efficiency Wage Model of the Wage Curve, the Phillips Curve, and the Natural Rate of Unemployment,” submitted to Labour Economics.
"Wage Change and the Quit Behavior of Workers: Implications for Efficiency Wage Theory." Southern Economic Journal, Vol.
"Wage Secrecy as a Social Convention," Economic Inquiry, 1996, (with L. Danziger).
www.niu.edu /econ/Directory/publications.shtml   (2473 words)

  
 Sample X4
The "spillover effect" suggests that the nonunion wage rate should _____; the "threat effect" suggests that the nonunion wage rate should _____.
The union wage advantage is bigger for workers with less education than for workers with more education
One implication of efficiency wage models is that:
www.marietta.edu /~delemeeg/econ371/exams/x4spring2002.htm   (1124 words)

  
 Efficiency Wage Theories: A Partial Evaluation
" Efficiency Wages Revisited: The Internal Reference Perspective," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 04.09, Université de Lausanne, Ecole des HEC, DEEP.
" Efficiency Wages Revisited: The Internal Reference Perspective," CEPR Discussion Papers 4503, C.E.P.R. Discussion Papers.
Evidence from the Turkish Cement Industry," Studies in Economics 9810, Department of Economics, University of Kent.
ideas.repec.org /p/nbr/nberwo/1906.html   (741 words)

  
 PIP / Module: Read-Only
SKILLSThis module will call for the successful student will be able to: -demonstrate analytical and numerical skills.
- Efficiency wage theory explaining macroeconomic in voluntary unemployment.
- Differences between neo-classical theories of wage determination and efficiency wage theory.
www.mdx.ac.uk /cgi-bin/mdx/pip/module_view_ext.asp?ModCode=ECS3540   (303 words)

  
 Michelle Alexopoulos
The Fair Wage Hypothesis Redux, Economics Letters 83 (2004), 391-398.
Growth and Unemployment in a Shirking Efficiency Wage Model Canadian Journal of Economics (2003), 728-746.
Efficiency Wages and Inter-Industry Wage Differentials [PDF 430kb]
www.economics.utoronto.ca /malex   (208 words)

  
 EconPapers: Efficiency Wages and Effort: Are Hard Jobs Better?
Efficiency Wages and Effort: Are Hard Jobs Better?
Abstract: Efficiency wage theory predicts that the wage per unit of effort will be lower in intensively monitored sectors.
Using employer-employee matched data from Ghana we provide evidence supporting this hypothesis.
econpapers.repec.org /paper/izaizadps/dp661.htm   (186 words)

  
 Directory Bio
Drago, R. "A Simple Keynesian Model of Efficiency Wages." Journal of Post Keynesian Economics 12:171-182.
"Is Worker Behavior Consistent with the Efficiency Wage Hypothesis?." Scottish Journal of Political Economy 39:141-153.
Drago, R. "Efficiency Wages." In O'Hara, P.A. (Ed.), Encyclopedia of Political Economy, Vol.
athens.pop.psu.edu /CtrPRI/DirBio.cfm?PeopleID=10   (895 words)

  
 PIP / Module: Read-Only
Theaims of this module are to provide a comprehension of laboureconomicsas a basis for understanding the management of humanresources; to enable anawareness of the impact of economic policy onlabour markets; and tocritically evaluate the relevance ofneo-classical analysis for actuallabour markets.
KNOWLEDGEAfter completing the module, students should be able to: - Derive andunderstand neo-classical labour theory; - Critically evaluateneo-classical labour theory; - Identify alternative labour theories; -Identify different economic schools of thought; - Understand the impactof different labour market institutions on wage and employment levels;- Have a broad understanding of differences across European labourmarkets.
Twohour lecture per week to convey issues and build student knowledgeandweekly one hour seminar in which students will be asked to discussspecifictopics.
www.mdx.ac.uk /cgi-bin/mdx/pip/module_view_ext.asp?ModCode=BEC3540   (183 words)

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