Estimating the shirking model with variable effort

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Estimating the shirking model with variable effort

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STROBL, Eric
WALSH, Frank

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Abstract

We show in a theoretical efficiency wage model where firms differ in monitoring intensity or in the effort intensity of their technologies that the impact of monitoring intensity on wages is ambiguous, a result that mirrors evidence from the empirical literature. We argue that to correctly specify the impact of monitoring on wages, the interaction between monitoring and effort needs to be modelled. Results using a worker, firm panel from Ghana which contains reasonable effort andmonitoring proxies show that the return to effort is higher in poorly monitored sectors as the theory suggests.

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Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2003075.

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Date of creation: 01 Oct 2003
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Handle: RePEc:cor:louvco:2003075

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Article
- Strobl, Eric & Walsh, Frank, 2007. "Estimating the shirking model with variable effort," Labour Economics, Elsevier, vol. 14(3), pages 623-637, June. [Downloadable!] (restricted)

Find related papers by JEL classification:
J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

Salop, Steven C, 1979. "A Model of the Natural Rate of Unemployment," American Economic Review, American Economic Association, vol. 69(1), pages 117-25, March. [Downloadable!] (restricted)
Cappelli, Peter & Chauvin, Keith, 1991. "An Interplant Test of the Efficiency Wage Hypothesis," The Quarterly Journal of Economics, MIT Press, vol. 106(3), pages 769-87, August. [Downloadable!] (restricted)

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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Sessions, John G. & Theodoropoulos, Nikolaos, 2008. "Tenure, Wage Profiles and Monitoring," IZA Discussion Papers 3307, Institute for the Study of Labor (IZA). [Downloadable!]
Other versions:
- Nikolaos Theodoropoulos & John G. Sessions, 2009. "Tenure, Wage Profiles and Monitoring," University of Cyprus Working Papers in Economics 5-2009, University of Cyprus Department of Economics. [Downloadable!]

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