Is Productivity Linked To Wages? An Empirical Investigation in Malaysia
AbstractThis study investigates the relationship between real wages, labor productivity and unemployment in Malaysia at the macroeconomic level, using time-series econometric techniques. The study found a long-term equilibrium relationship between labor productivity and real wages, but that unemployment was apparently unconnected to the system. The results suggested that labor productivity is positively related to real wage in the long run. However, the increase in real wage exceeds the increase in labor productivity causing an increase in unit labor cost. In addition, the study found a positive causal flow from productivity to wages in the short-run supporting the marginal productivity theory.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 18095.
Date of creation: Aug 2009
Date of revision:
real wages; productivity; Malaysia;
Find related papers by JEL classification:
- J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-10-31 (All new papers)
- NEP-DEV-2009-10-31 (Development)
- NEP-EFF-2009-10-31 (Efficiency & Productivity)
- NEP-LAB-2009-10-31 (Labour Economics)
- NEP-SEA-2009-10-31 (South East Asia)
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