Labour Quality and Wage Differentials
This paper presents a quality theory for labor. Analytical solutions for the equilibrium demand for labor quality equation and the equilibrium wage equation are computed. Wage differentials can be explained by variations in labor quality. A method that yields consistent estimates for all the parameters of the equilibrium demand for labor quality equation, the labor quality index equation, and the equilibrium wage equation is also presented. To illustrate the methodology, an application is presented that focuses on the market for seminars and the wages and quality characteristics of trainers. Copyright 1998 by Scottish Economic Society.
Volume (Year): 45 (1998)
Issue (Month): 2 (May)
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