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Wage Generosity

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  • Schlicht, Ekkehart

Abstract

Actual wages typically exceed collectively set standard wages. Standard wages are, therefore, not binding, yet they seem to influence actual wages strongly. An explanation for this phenomenon is offered along the lines of the Fair Wage/Effort Hypothesis proposed by G. Akerlof and J. Yellen (1990). It is argued that it is precisely when collectively set wages are relatively unimportant for perceptions of fairness at the firm level, that large wage mark-ups emerge. The general point seems to be that the results of economic modeling may react very sensitively to the customary suppression of "non-economic" factors.

Suggested Citation

  • Schlicht, Ekkehart, 1992. "Wage Generosity," Munich Reprints in Economics 3165, University of Munich, Department of Economics.
    • Handle: RePEc:lmu:muenar:3165
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    References listed on IDEAS

    as
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    Cited by:

    1. Max Albert & Jürgen Meckl, 2001. "Green Tax Reform and Two-Component Unemployment: Double Dividend or Double Loss?," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 157(2), pages 265-281, June.
    2. Ekkehart Schlicht, 2016. "Efficiency wages: Variants and implications," IZA World of Labor, Institute of Labor Economics (IZA), pages 275-275, July.
    3. Schlicht, Ekkehart, 2006. "Arbeitsmarkt und Beschäftigung," Discussion Papers in Economics 959, University of Munich, Department of Economics.
    4. Pull, Kerstin, 1999. "What is the fair wage? A model of as-if-co-operation," Quint-Essenzen 58, University of Trier, Institute for Labour Law and Industrial Relations in the European Community (IAAEG).
    5. Meckl, Jurgen, 2004. "Accumulation of technological knowledge, wage differentials, and unemployment," Journal of Macroeconomics, Elsevier, vol. 26(1), pages 65-82, March.
    6. Pischke, Jorn-Steffen & Dinardo, John & Hallock, Kevin F, 2000. "Unions And The Labour Market For Managers," CEPR Discussion Papers 2418, C.E.P.R. Discussion Papers.
    7. Franz, Wolfgang, 1995. "Theoretische Ansätze zur Erklärung der Arbeitslosigkeit: Wo stehen wir 1995?," Discussion Papers 27, University of Konstanz, Center for International Labor Economics (CILE).
    8. Frank Scharr, 2006. "Tarifbindung, Rententeilung und Konzessionsverträge als Einflussgrößen der Lohnhöhe in thüringischen Unternehmen," ifo Dresden berichtet, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 13(04), pages 17-23, 08.
    9. Pull, Kerstin, 1996. "Übertarifliche Entlohnung : ein Ergebnis vorweggenommener Verhandlungen (Wages above the collectively agreed level: a result of anticipated negotiations)," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 29(4), pages 607-615.
    10. Frank Scharr, 2005. "Tarifbindung, Rententeilung und Konzessionsverträge als Einflussgrößen der Lohnhöhe in Unternehmen : eine Untersuchung mit Mikrodaten für thüringische Firmen," ifo Dresden Studien, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 39.
    11. Ariane Breitfelder & Udo Broll & Kit Pong Wong, 2008. "Wages, Employment and Futures Markets," Finnish Economic Papers, Finnish Economic Association, vol. 21(2), pages 118-123, Autumn.

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