Do Rising Real Wages Increase The Rate Of Labor-Saving Technical Change? Some Econometric Evidence
The long-run relationship between real wages and labor productivity is investigated using cointegration and Granger non-causality tests for the US economy over the period 1869-1999. The series are cointegrated, indicating that there is a link between real wages and labor productivity in the long run. Granger non-causality tests support unidirectional causation from real wages to labor productivity. This outcome corroborates the conception that increases in real wages drive profit-seeking capitalists to raise labor productivity as their main weapon in defending their profitability. This result is consistent with a long tradition among economists that perceives technical change as being biased toward labor-saving. Copyright Blackwell Publishing Ltd 2004.
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Volume (Year): 55 (2004)
Issue (Month): 4 (November)
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