Work incentive and productivity in Spain
AbstractWork incentives are closely related to production performance. This paper presents evidence that the value added of a firm increases when relative labor costs rise, or the level of unemployment increases. Both circumstances imply evidence in favor of the efficiency wage model. This theory is consistent with the views of many managers and personal administrators, who tend to ascribe primary importance to wage setting as an incentive to increase effort. We use a micro panel data set of Spanish manufacturing firms, during the period 2004–2009, to simultaneously estimate a stochastic frontier of a firm’s value added and the inefficiency determinants. The data source is published in the Spanish Industrial Survey on Business Strategies (Encuesta sobre Estrategias Empresariales, ESEE), collected by the Fundación SEPI.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 46487.
Date of creation: 22 Apr 2013
Date of revision:
efficiency; value added; labor economic; industrial relations.;
Find related papers by JEL classification:
- D2 - Microeconomics - - Production and Organizations
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-04-27 (All new papers)
- NEP-EFF-2013-04-27 (Efficiency & Productivity)
- NEP-HRM-2013-04-27 (Human Capital & Human Resource Management)
- NEP-LMA-2013-04-27 (Labor Markets - Supply, Demand, & Wages)
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