The aim of this paper is to test the relationship between wage and workers’ labor effort for the Brazilian construction industry. This relationship is stated by both the shirking and the labor discipline versions of efficiency wage models. Actually workers’ labor effort is neither verifiable nor available for empirical tests, so the most of the empirical tests for this theory are performed by testing the trade-off between wages and supervision, and the trade-off between wages and the workers’ probability of termination. This paper provides empirical tests for both relationships, and the efficiency wage model hypothesis is empirically supported by this paper.
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Paper provided by Universidade Federal do Paraná, Department of Economics in its series Working Papers with number
0058.
Length: 17 pages Date of creation: Mar 2007 Date of revision: Handle: RePEc:fup:wpaper:0058
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Find related papers by JEL classification: J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data
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