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A Bioeconomic Foundation for the Nutrition-based Efficiency Wage Model

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  • Dalgaard, Carl-Johan
  • Strulik, Holger

Abstract

Drawing on recent research on allometric scaling and energy consumption, the present paper develops a nutrition-based efficiency wage model from first principles. The biologically micro-founded model allows us to address empirical criticism of the original nutrition-based efficiency wage model. By extending the model with respect to heterogeneity in worker body size and a physiologically founded impact of body size on productivity, we demonstrate that the nutrition-based efficiency wage model is compatible with the empirical regularity that taller workers simultaneously earn higher wages and are less likely to be unemployed in less developed economies. The theory also provides an answer to the question of why such regularity may disappear in the process of development.

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Bibliographic Info

Paper provided by Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät in its series Hannover Economic Papers (HEP) with number dp-396.

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Length: 21 pages
Date of creation: Apr 2008
Date of revision:
Handle: RePEc:han:dpaper:dp-396

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Keywords: Efficiency Wages; Nutrition; Metabolism; Allometric Scaling; Body Size;

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References

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  1. Robert W. Fogel, 1994. "Economic Growth, Population Theory, and Physiology: The Bearing of Long-Term Processes on the Making of Economic Policy," NBER Working Papers 4638, National Bureau of Economic Research, Inc.
  2. T. Paul Schultz, 2002. "Wage Gains Associated with Height as a Form of Health Human Capital," American Economic Review, American Economic Association, vol. 92(2), pages 349-353, May.
  3. Galor, Oded & Weil, David, 1995. "The Gender Gap, Fertility and Growth," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1157, C.E.P.R. Discussion Papers.
  4. Dalgaard, Carl-Johan & Strulik, Holger, 2007. "A Bioeconomic Foundation of the Malthusian Equilibrium: Body Size and Population Size in the Long-Run," Hannover Economic Papers (HEP), Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät dp-373, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
  5. Bose, Gautam, 1997. "Nutritional efficiency wages: a policy framework," Journal of Development Economics, Elsevier, vol. 54(2), pages 469-478, December.
  6. Swamy, Anand V., 1997. "A simple test of the nutrition-based efficiency wage model," Journal of Development Economics, Elsevier, vol. 53(1), pages 85-98, June.
  7. Dasgupta, Partha & Ray, Debraj, 1986. "Inequality as a Determinant of Malnutrition and Unemployment: Theory," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 96(384), pages 1011-34, December.
  8. T. Paul Schultz, 2002. "Wage Gains Associated with Height as a Form of Health Human Capital," Working Papers, Economic Growth Center, Yale University 841, Economic Growth Center, Yale University.
  9. Deolalikar, Anil B, 1988. "Nutrition and Labor Productivity in Agriculture: Estimates for Rural South India," The Review of Economics and Statistics, MIT Press, vol. 70(3), pages 406-13, August.
  10. Dasgupta, Partha, 1997. "Nutritional status, the capacity for work, and poverty traps," Journal of Econometrics, Elsevier, Elsevier, vol. 77(1), pages 5-37, March.
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Blog mentions

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  1. The advantage of being tall
    by Economic Logician in Economic Logic on 2008-11-10 10:11:00

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