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Ownership, Agency and Wages: An Examination of the Fast Food Industry

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  • Alan B. Krueger

    (Princeton University)

Abstract

This paper examines the determinants of wages and fringe benefits in the fast food industry- The focus of the paper is on exploring differences between company-owned and franchised restaurants because agency problems are likely to affect the management and operation of company-owned restaurants- Empirical analysis of two data sets finds that total labor compensation for non-management employees is slightly greater at company-owned outlets than franchisee-owned outlets, all else held constant. Furthermore, workers' wages grow more rapidly over time at company-owned restaurants than franchisee-owned restaurants- In addition, the results suggest that wage differentials for race, sex and marital status are small in the fast food industry relative to other industries.

Suggested Citation

  • Alan B. Krueger, 1987. "Ownership, Agency and Wages: An Examination of the Fast Food Industry," Working Papers 606, Princeton University, Department of Economics, Industrial Relations Section..
    • Handle: RePEc:pri:indrel:226
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    2. Michael Ian Cragg, 1995. "Performance Incentives in Government Subcontracting: Evidence from the Job Training Partnership Act (JTPA)," Labor and Demography 9507001, University Library of Munich, Germany.

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    More about this item

    Keywords

    agency; efficiency wages; fast food; wage differentials;
    All these keywords.

    JEL classification:

    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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