Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/148500 
Year of Publication: 
2016
Citation: 
[Journal:] IZA World of Labor [ISSN:] 2054-9571 [Article No.:] 275 [Publisher:] Institute for the Study of Labor (IZA) [Place:] Bonn [Year:] 2016
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
Higher wages increase labor costs but also improve the productivity of the labor force in several ways. If firms take this into account and set their wages accordingly, the resulting wages could fail to adjust demand and supply but may induce phenomena like over-education, discrimination, regional wage differentials, and a tendency for larger firms to pay higher wages. All these phenomena are quantitatively important and well-established empirically. Efficiency wage theory provides an integrated theoretical explanation rather than a sundry list of reasons, and offers an efficiency argument for progressive income taxation.
Subjects: 
efficiency wages
selection wages
turnover
morale
discipline
JEL: 
J31
J63
Persistent Identifier of the first edition: 
Document Type: 
Article

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