Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/30100
Authors: 
Bangwayo-Skeete, Prosper F.
Rahim, Afaf H.
Zikhali, Precious
Year of Publication: 
2009
Series/Report no.: 
Joint discussion paper series in economics 2009,33
Abstract: 
What makes workers consider it fair for wages to be indexed on job performance or efficiency? In this paper we attempt to answer this question using the 2005 wave of the World Values Survey data for 43 countries to investigate what socio-economic characteristics condition employees' preference for efficiency over equity wages. Our results suggest that employees' preference for efficiency wages increases with education and globalization while it decreases with unemployment, income inequality and income tax rates. Given that conventional economic theory demonstrates the importance of labour efficiency, which improves when workers are remunerated according to their efficiency, for economic growth; our results suggest that institutions and specifically public policies that promote education, and globalization, along with policies that reduce unemployment, income inequality and income tax rates could be used to promote efficiency-based wages.
JEL: 
D02
I21
O15
Document Type: 
Working Paper

Files in This Item:
File
Size
150.63 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.