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Work incentive and productivity in Spain

Author

Listed:
  • Rosario Sanchez
  • Mª Isabel Pisa

Abstract

Work incentives are closely related with production performance. This paper presents evidence that firm level value added increases when the relative labour cost rises, or the level of unemployment increases. Both facts imply evidence in favour of the efficiency wage model. This theory is consistent with the views of many managers and personal administrator, who tend to ascribe primary importance in wage setting to incentive effort. We use a micro panel data set of Spanish manufacturing firms, during the period 2004–2009, to simultaneously estimate a stochastic frontier of firm’s value added and the inefficiency determinants. The data source is published in the Spanish Industrial Survey on Business Strategies (Encuesta sobre Estrategias Empresariales, ESEE), collected by the Fundación Empresa Pública (FEP). See above See above

Suggested Citation

  • Rosario Sanchez & Mª Isabel Pisa, 2013. "Work incentive and productivity in Spain," EcoMod2013 5668, EcoMod.
    • Handle: RePEc:ekd:004912:5668
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    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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