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The Trade-Off Between Supervision and Wages: Evidence of Efficiency Wages from the NLSY

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Author Info

  • Bradley T. Ewing
  • James E. Payne

Abstract

Standard efficiency wage models suggest that workers employed in places with lower probabilities of identifying shirking will earn more, as will workers who have better alternative opportunities. This paper provides new empirical evidence in support of efficiency wage theory using the National Longitudinal Surveys of Youth data. The empirical results support the prediction of the model that workers employed in larger work groups are paid more, a finding consistent with a supervision–wage trade-off. Additional evidence supports the prediction that workers with better alternative opportunities earn more.

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Bibliographic Info

Article provided by Southern Economic Association in its journal Southern Economic Journal.

Volume (Year): 66 (1999)
Issue (Month): 2 (October)
Pages: 424-432

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Handle: RePEc:sej:ancoec:v:66:2:y:1999:p:424-432

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Web page: http://www.southerneconomic.org/
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Cited by:
  1. Bradley Ewing & Phanindra Wunnava, 2002. "The Trade-Off Between Supervision Cost and Performance-Based Pay: Does it Matter?," Middlebury College Working Paper Series, Middlebury College, Department of Economics 0232, Middlebury College, Department of Economics.
  2. Robert E. Evenson & Ayal Kimhi & Sanjaya DeSilva, 2000. "Supervision and Transaction Costs: Evidence from Rice Farms in Bicol, the Philippines," Working Papers, Economic Growth Center, Yale University 814, Economic Growth Center, Yale University.
  3. Evenson, R.E. & Kimhi, A. & DeSilva, S., 2000. "Supervision and Transaction Costs: Evidence from Rice Farms in Bicol, the Philippines," Papers, Yale - Economic Growth Center 814, Yale - Economic Growth Center.
  4. Bradley Ewing & Phanindra Wunnava, 2004. "The Trade-Off Between Supervision Cost and Performance Based Pay: Does Gender Matter?," Small Business Economics, Springer, Springer, vol. 23(5), pages 453-460, December.
  5. John G. Sessions & Nikolaos Theodoropoulos, 2009. "Tenure, Wage Profiles and Monitoring," University of Cyprus Working Papers in Economics, University of Cyprus Department of Economics 4-2009, University of Cyprus Department of Economics.
  6. James Roumasset, 2006. "The Economics of Agricultural Development: What Have We Learned? Processes," Working Papers, University of Hawaii at Manoa, Department of Economics 200604, University of Hawaii at Manoa, Department of Economics.
  7. Sarah Brown & Fathi Fakhfakh & John G. Sessions, . "Wages, Supervision and Sharing," Discussion Papers in Public Sector Economics, Department of Economics, University of Leicester 00/4, Department of Economics, University of Leicester.
  8. Akinori Tomohara & Akihiko Ohno, 2013. "What are Relevant Work Incentive Models? Shirking Model, Gift Exchange Model, or Reciprocity Model," Journal of Labor Research, Springer, Springer, vol. 34(2), pages 241-252, June.
  9. Ourania Karakosta & Nikos Tsakiris, 2009. "Indirect Tax Reforms and Public Goods under Imperfect Competition," University of Cyprus Working Papers in Economics, University of Cyprus Department of Economics 5-2009, University of Cyprus Department of Economics.

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