Estimating the shirking model with variable effort
We show in a theoretical efficiency wage model where firms differ in monitoring intensity or in the effort intensity of their technologies that the impact of monitoring intensity on wages is ambiguous, a result that mirrors evidence from the empirical literature. We argue that to correctly specify the impact of monitoring on wages, the interaction between monitoring and effort needs to be modelled. Results using a worker, firm panel from Ghana which contains reasonable effort andmonitoring proxies show that the return to effort is higher in poorly monitored sectors as the theory suggests.
|Date of creation:||00 Oct 2003|
|Date of revision:|
|Contact details of provider:|| Postal: Voie du Roman Pays 34, 1348 Louvain-la-Neuve (Belgium)|
Fax: +32 10474304
Web page: http://www.uclouvain.be/core
More information through EDIRC
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.:
- Frank Walsh, 1995.
"A multisector model of efficiency wages,"
199501, School of Economics, University College Dublin.
- Johansson, Per & Palme, Marten, 1996. "Do economic incentives affect work absence? Empirical evidence using Swedish micro data," Journal of Public Economics, Elsevier, vol. 59(2), pages 195-218, February.
- Solow, Robert M., 1979. "Another possible source of wage stickiness," Journal of Macroeconomics, Elsevier, vol. 1(1), pages 79-82.
- Salop, Steven C, 1979. "A Model of the Natural Rate of Unemployment," American Economic Review, American Economic Association, vol. 69(1), pages 117-25, March.
- Goldsmith, Arthur H. & Veum, Jonathan R. & Darity, William Jr., 2000. "Working hard for the money? Efficiency wages and worker effort," Journal of Economic Psychology, Elsevier, vol. 21(4), pages 351-385, August.
- Teal, Francis, 1996.
"The Size and sources of economic rents in a developing country manufacturing labour market,"
Royal Economic Society, vol. 106(437), pages 963-76, July.
- Francis Teal, 1995. "The size and sources of economic rents in a developing country manufacturing labour market," CSAE Working Paper Series 1995-06, Centre for the Study of African Economies, University of Oxford.
- Laszlo Goerke, 2001. "On the Relationship Between Wages and Monitoring in Shirking Models," Metroeconomica, Wiley Blackwell, vol. 52(4), pages 376-390, November.
- Konings, Jozef & Walsh, Patrick P, 1994.
"Evidence of Efficiency Wage Payments in UK Firm Level Panel Data,"
Royal Economic Society, vol. 104(424), pages 542-55, May.
- J Konings & Patrick Paul Walsh, 1993. "Evidence of Efficiency Wage Payments in UK Firm Level Panel Data," CEP Discussion Papers dp0138, Centre for Economic Performance, LSE.
- Peter Cappelli & Keith Chauvin, 1991. "An Interplant Test of the Efficiency Wage Hypothesis," The Quarterly Journal of Economics, Oxford University Press, vol. 106(3), pages 769-787.
- Faria, Joao Ricardo, 2000. "Supervision and effort in an intertemporal efficiency wage model: the role of the Solow condition," Economics Letters, Elsevier, vol. 67(1), pages 93-98, April.
- Laszlo Goerke, 2008. "On The Relationship Between Wages And Monitoring: A Reply," Metroeconomica, Wiley Blackwell, vol. 59(1), pages 45-46, 02.
- Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June.
- Black, Dan A & Garen, John E, 1991. "Efficiency Wages and Equilibrium Wages," Economic Inquiry, Western Economic Association International, vol. 29(3), pages 525-40, July.
- Alan B. Krueger, 1991. "Ownership, Agency, and Wages: An Examination of Franchising in the Fast Food Industry," The Quarterly Journal of Economics, Oxford University Press, vol. 106(1), pages 75-101.
- Strobl, Eric & Walsh, Frank, 2002. "Getting It Right: Employment Subsidy or Minimum Wage?," IZA Discussion Papers 662, Institute for the Study of Labor (IZA).
When requesting a correction, please mention this item's handle: RePEc:cor:louvco:2003075. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Alain GILLIS)
If references are entirely missing, you can add them using this form.