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Wage Fairness, Growth and the Utilization of R&D Workers

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Author Info
Lundborg, Per (Trade Union Institute for Economic Research)
Abstract

In 1999, only one of three US scientists and engineers was employed to do R&D and, in several countries over the last forty to fifty years, employment of skilled workers for R&D purposes appears not to have kept pace with the overall increase in the supply of skilled workers. Low utilization of R&D personnel implies low growth per human capital endowments. To analyze the low R&D utilization/low growth equilibria, we set up an endogenous growth model in which firms set fair wages and which allows for an analysis of changes in the utilization rate of R&D workers. We find that the rise in under utilization and the fall in growth per human capital to be consistent with the increase in the demand for higher education. This could be interpreted as the “consumption” element in higher education has received an increased importance yielding a low growth effect of higher education. The results also point at problems of correctly measuring actual human capital inputs in firms.

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Paper provided by Trade Union Institute for Economic Research in its series Working Paper Series with number 206.

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Length: 22 pages
Date of creation: 19 Sep 2005
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Handle: RePEc:hhs:fiefwp:0206

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Keywords: Efficiency wages; fairness; growth;

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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
O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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  1. Heyman, Fredrik, 2004. "The Employer Age-Wage Effect: Evidence from Matched Employer-Employee Data," Working Paper Series 193, Trade Union Institute for Economic Research. [Downloadable!]
  2. Antelius, Jesper & Zetterberg, Johnny, 2004. "Intelligens och personlighetsdrag som förklaring till inkomst(löne-)skillnader mellan individer," Working Paper Series 202, Trade Union Institute for Economic Research. [Downloadable!]
  3. Arai, Mahmood & Heyman, Fredrik, 2004. "Microdata Evidence on Rent-Sharing," Working Paper Series 198, Trade Union Institute for Economic Research. [Downloadable!]
    Other versions:
  4. Fredrik Heyman, 2005. "Pay inequality and firm performance: evidence from matched employer--employee data," Applied Economics, Taylor and Francis Journals, vol. 37(11), pages 1313-1327, June. [Downloadable!] (restricted)
    Other versions:
  5. Larsson, Anna & Zetterberg, Johnny, 2003. "Does Inflation Targeting Matter for Labour Markets? – Some Empirical Evidence," Working Paper Series 191, Trade Union Institute for Economic Research. [Downloadable!]
  6. Pekkarinen, Tuomas & Vartiainen, Juhana, 2002. "Gender Differences in Job Assignment and Promotion in a Complexity Ladder of Jobs," Working Paper Series 184, Trade Union Institute for Economic Research. [Downloadable!]
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  7. Nekby, Lena, 2002. "Gender Differences in Rent Sharing and its Implications for the Gender Wage Gap," Working Paper Series 182, Trade Union Institute for Economic Research. [Downloadable!]
  8. Nekby, Lena, 2002. "Employment Convergence of Immigrants and Natives in Sweden," Research Papers in Economics 2002:9, Stockholm University, Department of Economics. [Downloadable!]
  9. Larsson, Anna, 2002. "The Swedish Real Exchange Rate under Different Currency Regimes," Working Paper Series 180, Trade Union Institute for Economic Research, revised 18 Sep 2003. [Downloadable!]
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  10. Annika Alexius & Mikael Carlsson, 2005. "Measures of Technology and the Business Cycle," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 299-307, 06. [Downloadable!] (restricted)
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  11. Alexius, Annika & Carlsson, Mikael, 2001. "Measures of Technology and the Business Cycle: Evidence from Sweden and the U.S," Working Paper Series 174, Trade Union Institute for Economic Research. [Downloadable!]
  12. Arai, Mahmood & Heyman, Fredrik, 2001. "Wages, Profits and Individual Unemployment Risk : Evidence from Matched Worker-Firm Data," Working Paper Series 172, Trade Union Institute for Economic Research. [Downloadable!]
  13. Arai, Mahmood & Vilhelmsson, Roger, 2001. "Immigrants' and Natives' Unemployment-risk: Productivity Differentials or Discrimination?," Working Paper Series 169, Trade Union Institute for Economic Research. [Downloadable!]
  14. Bandick, Roger, 2004. "Do Workers Benefit from Foreign Ownership? Evidence from Swedish Manufacturing," Working Papers 2004:15, Örebro University, Swedish Business School.
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  15. Heyman, Fredrik, 2002. "Wage Dispersion and Job Turnover: Evidence from Sweden," Working Paper Series 181, Trade Union Institute for Economic Research. [Downloadable!]
  16. Arai, Mahmood & Thoursie, Peter Skogman, 2005. "Incentives and selection in cyclical absenteeism," Labour Economics, Elsevier, vol. 12(2), pages 269-280, April. [Downloadable!] (restricted)
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  17. Alexius, Annika, 2001. "How to Beat the Random Walk," Working Paper Series 175, Trade Union Institute for Economic Research. [Downloadable!]
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