Wage differentials by firm size: the efficiency wage test in a developing country

Wage Differentials in Experimental Efficiency Wage Markets

In recent years, many econometric studies have confirmed the existence of inter-industry wage differentials. Even after controlling for a large number of joband worker related characteristics, and demographic variables, large and statistically significant industry wage differences remain. Moreover, these differences exist for union as well as for non-union workers and seem to be remarkably simi...

Test Of Efficiency- Wage Model For Iran's Economy

Wage Differentials as Reputation

Equilibrium search models obtained endogenous wage differentials among identical firms and workers based on the equal profit assumption. We formulate a more fundamentally dynamic game with identical players where workers can strategically quit and firms cannot commit to future wages, and find that equilibrium wage differentials arise due to different worker expectations on the firms’ future beh...

The sources of wage growth in a developing country

What are the sources of wage growth in developing countries? In the USA, general labor market experience is the key source of wage growth, with job seniority playing a smaller role. By contrast, in Indonesia, the 10-year return to seniority is 24 to 28 %, which is higher than the return to experience. Furthermore, we estimate a 35 % return to 10 years of tenure in the formal sector, with no sig...

Unemployment risk and wage differentials

Workers in less-secure jobs are often paid less than identical-looking workers in more secure jobs. We show that this lack of compensating differentials for unemployment risk can arise in equilibrium when all workers are identical and firms differ only in job security (i.e. the probability that the worker is not sent into unemployment). In a setting where workers search for new positions both o...