Carrots and Sticks: Pay, Supervision, and Turnover
The efficiency wage model (EWM) has been advanced as an explanation for large and persistent wage differentials. The shirking version of the EWM assumes a trade-off b etween self-supervision and external supervision. The turnover versio n assumes turnover is costly to the firm. Variation across firms in t he cost of monitoring/shirking or turnover then is hypothesized to ac count for wage variations across firms for homogeneous workers. Using a new sample of firm data, this paper presents empirical evidence of the trade-off of wage premiums for supervisory intensity and turnove r. Little evidence is found to support either version of the EWM. Copyright 1987 by University of Chicago Press.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Katharine G. Abraham & Henry S. Farber, 1986.
"Job Duration, Seniority and Earnings,"
407, Massachusetts Institute of Technology (MIT), Department of Economics.
- Charles Brown & James L. Medoff, 1989.
"The Employer Size-Wage Effect,"
NBER Working Papers
2870, National Bureau of Economic Research, Inc.
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