Estimating the shirking model with variable effort
AbstractWe 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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Bibliographic InfoPaper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2003075.
Date of creation: 00 Oct 2003
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efficiency wages; effort; monitoring intensity;
Other versions of this item:
- Strobl, Eric & Walsh, Frank, 2007. "Estimating the shirking model with variable effort," Labour Economics, Elsevier, vol. 14(3), pages 623-637, June.
- J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
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