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Wages of Occupations in Theory... and Practice

  • Stephan Kampelmann
  • François Rycx

Conventional models of earnings assume that the occupational pay structure reflects the distribution of marginal productivities. Although ubiquitious in the literature, the underlying hypothesis that wages equal marginal products rests on weak empirical footing: extant studies from the 1970s suggested that occupations at the top of the wage hierarchy are over- and occupations at the bottom underpaid with respect to their contributions to firm-level added value. This article surveys the theoretical literature on such productivtiy-wage gaps and presents recent econometric evidence that confirms a disconnection between the remuneration and the productivity of occupational groups.

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Article provided by De Boeck Université in its journal Reflets et perspectives de la vie économique.

Volume (Year): L (2011)
Issue (Month): 4 ()
Pages: 119-131

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Handle: RePEc:cai:rpvedb:rpve_504_0119
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