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A physiological foundation for the nutrition-based efficiency wage model

  • Carl-Johan Dalgaard
  • Holger Strulik

Drawing on recent research on allometric scaling and energy consumption, the present paper develops a nutrition-based efficiency wage model from first principles. The biologically micro-founded model allows us to address empirical criticism of the original nutrition-based efficiency wage model. By extending the model with respect to heterogeneity in worker body size and a physiologically founded impact of body size on productivity, we demonstrate that the nutrition-based efficiency wage model is compatible with the empirical regularity that taller workers simultaneously earn higher wages and are less likely to be unemployed in less developed economies. The theory also provides an answer to the question of why the height-unemployment association may disappear in the process of development. Copyright 2011 Oxford University Press 2010 All rights reserved, Oxford University Press.

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Article provided by Oxford University Press in its journal Oxford Economic Papers.

Volume (Year): 63 (2011)
Issue (Month): 2 (April)
Pages: 232-253

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Handle: RePEc:oup:oxecpp:v:63:y:2011:i:2:p:232-253
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  1. Fogel, Robert W., 1993. "Economic Growth, Population Theory, and Physiology: The Bearing of Long-Term Processes on the Making of Economic Policy," Nobel Prize in Economics documents 1993-1, Nobel Prize Committee.
  2. Bliss, Christopher & Stern, Nicholas, 1978. "Productivity, wages and nutrition : Part II: Some observations," Journal of Development Economics, Elsevier, vol. 5(4), pages 363-398, December.
  3. Dasgupta, Partha & Ray, Debraj, 1986. "Inequality as a Determinant of Malnutrition and Unemployment: Theory," Economic Journal, Royal Economic Society, vol. 96(384), pages 1011-34, December.
  4. Solow, Robert M., 1979. "Another possible source of wage stickiness," Journal of Macroeconomics, Elsevier, vol. 1(1), pages 79-82.
  5. Dasgupta, Partha, 1997. "Nutritional status, the capacity for work, and poverty traps," Journal of Econometrics, Elsevier, vol. 77(1), pages 5-37, March.
  6. Oded Galor & David N. Weil, 1993. "The Gender Gap, Fertility, and Growth," NBER Working Papers 4550, National Bureau of Economic Research, Inc.
  7. Bose, Gautam, 1997. "Nutritional efficiency wages: a policy framework," Journal of Development Economics, Elsevier, vol. 54(2), pages 469-478, December.
  8. Komlos, John, 2003. "An anthropometric history of early-modern France," European Review of Economic History, Cambridge University Press, vol. 7(02), pages 159-189, August.
  9. Bliss, Christopher & Stern, Nicholas, 1978. "Productivity, wages and nutrition : Part I: the theory," Journal of Development Economics, Elsevier, vol. 5(4), pages 331-362, December.
  10. Strauss, John, 1986. "Does Better Nutrition Raise Farm Productivity?," Journal of Political Economy, University of Chicago Press, vol. 94(2), pages 297-320, April.
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