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Disentangling the wage-productivity relationship: Evidence from select OECD member countries

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  • Meghan Millea

Abstract

Conventional theory proposes that firms reward productivity improvements with higher wages. Conversely, efficiency wage theory suggests that wages can induce greater productivity. This paper applies a statistical technique that disentangles the potential bidirectional feedback between wages and productivity. Wage strategies in six industrialized countries with various labor market institutions are examined. Conventional and efficiency wage practices vary systematically across the industrialized countries; these variations are consistent with the expected effects of labor market institutions. Copyright International Atlantic Economic Society 2002

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  • Meghan Millea, 2002. "Disentangling the wage-productivity relationship: Evidence from select OECD member countries," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 8(4), pages 314-323, November.
    • Handle: RePEc:kap:iaecre:v:8:y:2002:i:4:p:314-323:10.1007/bf02295506
    DOI: 10.1007/BF02295506
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    Cited by:

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    5. Jiménez Polanco, Miguel Alejandro & López Hawa, Nabil, 2017. "Explicando la brecha entre el salario real y la productividad laboral en la República Dominicana: Análisis macroeconómico y recomendaciones de políticas basadas en microsimulaciones [Explaining the," MPRA Paper 83441, University Library of Munich, Germany.
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    8. Nurliyana Mohd Basri & Zulkefly Abdul Karim & Noorasiah Sulaiman, 2020. "The Effects of Factors of Production Shocks on Labor Productivity: New Evidence Using Panel VAR Analysis," Sustainability, MDPI, vol. 12(20), pages 1-23, October.

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