Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/74549
Authors: 
Elgin, Ceyhun
Kuzubas, Tolga Umut
Year of Publication: 
2013
Citation: 
[Journal:] Economics: The Open-Access, Open-Assessment E-Journal [Volume:] 7 [Issue:] 2013-21 [Pages:] 1-21
Abstract: 
The Walrasian theory of labor market equilibrium predicts that in the absence of any market frictions, workers earn a wage rate equal to their marginal productivity. In this paper, based on the neoclassical tradition, the authors define the ratio of the marginal product of labor to real wages as the Pigouvian exploitation rate and then construct a panel dataset of this specific wage-productivity gap for the manufacturing sector in OECD economies. Next, they investigate its relationship with the unemployment rate along with various other variables such as the government taxation, capital expansion, unionization, inflation. Their findings suggest that the wage-productivity gap gives a robust and significantly positive response to shocks to unemployment rate and a negative response to shocks to unionization.
Subjects: 
wages
marginal productivity of labor
panel-VAR
OECD economies
JEL: 
J24
J30
J64
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by/3.0/
Document Type: 
Article

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