Wage Differentials By Firm Size: The Efficiency Wage Test In A Developing Country
Using data from the Brazilian Labor Monthly Survey (PME/ IBGE) for the years of 2006 and 2007, the paper investigates if the wage differential by firm size in Brazil can be explained by the predictions of the Efficiency Wage Theory. It is adopted a Switching Regression Model to estimate if large size companies pay a higher wage premium for dispended labor effort, as compared to smaller enterprises. The results proved the EW predictions. Besides the positive relation between effort and wage differentials by firm size, the results also showed that such wage differences favors larger firms, as compared to smaller ones, because they tend to remunerate better more skilled employees with long term contracts.
References listed on IDEAS
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.:
- David B. Gross & Nicholas S. Souleles, 2001. "Do Liquidity Constraints and Interest Rates Matter for Consumer Behavior? Evidence from Credit Card Data," NBER Working Papers 8314, National Bureau of Economic Research, Inc.
- Alison L. Booth & Marco Francesconi & Jeff Frank, 2002.
"Temporary Jobs: Stepping Stones Or Dead Ends?,"
Royal Economic Society, vol. 112(480), pages 189-213, June.
- Booth, Alison L. & Francesconi, Marco & Frank, Jeff, 2000. "Temporary Jobs: Stepping Stones or Dead Ends?," IZA Discussion Papers 205, Institute for the Study of Labor (IZA).
- Alison L. Booth & Marco Francesconi & Jeff Frank, 2002. "Temporary Jobs: Stepping Stones or Dead Ends?," LABORatorio R. Revelli Working Papers Series 8, LABORatorio R. Revelli, Centre for Employment Studies.
- William T. Dickens & Lawrence F. Katz, 1987. "Inter-Industry Wage Differences and Theories of Wage Determination," NBER Working Papers 2271, National Bureau of Economic Research, Inc.
- William T. Dickens, 1986. "Wages, Employment and the Threat of Collective Action by Workers," NBER Working Papers 1856, National Bureau of Economic Research, Inc.
- Oi, Walter Y, 1983. "Heterogeneous Firms and the Organization of Production," Economic Inquiry, Western Economic Association International, vol. 21(2), pages 147-171, April.
- Joseph E. Stiglitz, 1974. "Alternative Theories of Wage Determination and Unemployment in LDC's: The Labor Turnover Model," The Quarterly Journal of Economics, Oxford University Press, vol. 88(2), pages 194-227.
- Josef Zweimuller & Rudolf Winter-Ebmer, 1999.
"Firm-Size Wage Differentials in Switzerland: Evidence from Job-Changers,"
American Economic Review,
American Economic Association, vol. 89(2), pages 89-93, May.
- Rudolf Winter-Ebmer & Josef Zweimueller, "undated". "Firm Size Wage Differentials in Switzerland: Evidence from Job Changers," IEW - Working Papers 001, Institute for Empirical Research in Economics - University of Zurich.
- George A. Akerlof, 1982. "Labor Contracts as Partial Gift Exchange," The Quarterly Journal of Economics, Oxford University Press, vol. 97(4), pages 543-569.
- Luiz A. Esteves, 2008.
"Salário Eficiência e Esforço de Trabalho: Evidências da Indústria Brasileira de Construção,"
ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics], vol. 9(2), pages 327-341.
- Luiz A. Esteves, 2008. "Salário Eficiência e Esforço de Trabalho: Evidências da Indústria Brasileira de Construção," Working Papers 0080, Universidade Federal do Paraná, Department of Economics.
- A. D. Roy, 1951. "Some Thoughts On The Distribution Of Earnings," Oxford Economic Papers, Oxford University Press, vol. 3(2), pages 135-146.
- Solow, Robert M., 1979. "Another possible source of wage stickiness," Journal of Macroeconomics, Elsevier, vol. 1(1), pages 79-82. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:wiw:wiwrsa:ersa11p1465. 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: (Gunther Maier)
If references are entirely missing, you can add them using this form.