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Do Higher Wages Reflect Higher Productivity? Education, Gender and Experience Premiums in a Matched Plant-Worker Data Set

In: The Creation and Analysis of Employer-Employee Matched Data

Author

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  • Torbjorn Hacgeland
  • Tor Jakob Klette

Abstract

Do wage differences between workers with high and low levels of education, between males and females and between workers with different levels of experience reflect differences in productivity? We address this set of questions on the basis of a data set with variables for individual workers matched with a comprehensive data set for manufacturing plants in Norway for the period 1986-93. The results suggest that workers with higher education tend to be more productive, roughly in accordance to their wage premium. Female workers are cet. par. found to be less productive than male workers, and this is reflected in their wages. Experienced workers are on average found to be more productive. For workers with 8 to 15 years of experience, the productivity premium exceeds the wage premium, while the opposite is the case for workers with more than 15 years of experience.
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Suggested Citation

  • Torbjorn Hacgeland & Tor Jakob Klette, 1999. "Do Higher Wages Reflect Higher Productivity? Education, Gender and Experience Premiums in a Matched Plant-Worker Data Set," Contributions to Economic Analysis, in: The Creation and Analysis of Employer-Employee Matched Data, pages 231-259, Emerald Group Publishing Limited.
    • Handle: RePEc:eme:ceazzz:s0573-8555(1999)0000241011
    DOI: 10.1108/S0573-8555(1999)0000241011
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    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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