Wages Equal Productivity: Fact or Fiction? / Johannes Van Biesebroeck.

Format:

Book

Author/Creator:

Van Biesebroeck, Johannes.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w10174.

NBER working paper series no. w10174

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Wages Equal Productivity

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2003.

Summary:

Using a matched employer-employee data set of manufacturing plants in three sub-Saharan countries, I compare the marginal productivity of different categories of workers with the wages they earn. Under certain conditions, the wage premiums for worker characteristics should equal the productivity benefits associated with them. I find that equality holds strongly for the most developed country in the sample (Zimbabwe), but not at all for the least developed country (Tanzania). Differences between wage and productivity premiums are most pronounced for characteristics that are clearly related to human capital, such as schooling, training, experience, and tenure. Localized labor markets, imperfect substitutability of different worker-types, sampling errors, and nonlinear effects are rejected as explanation for the gap between wage and productivity effects.

Notes:

Print version record

December 2003.