Working Paper: CEPR ID: DP1233
Authors: John Abowd; Francis Kramarz; Antoine Moreau
Abstract: We study the relation between product quality and worker quality using an economic model that, under certain conditions, provides a direct link between product price, product quality and work-force quality. Our measures of product quality are the evolution in the detailed product price relative to its product group, and the level of the product price relative to this group. Our worker quality measures are the firm's average person effect and personal characteristics effect from individual wage rates. We find a very weak, generally positive, relation between worker quality and product quality using detailed firm-level data from the French Producer Price Index surveys.
Keywords: wages; product quality; worker quality
JEL Codes: J30; L15
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| product quality (L15) | product price (D41) |
| complexity of production processes (L23) | relationship between product quality and worker quality (L15) |
| market structures (D49) | relationship between product quality and worker quality (L15) |
| worker quality (J81) | product quality (L15) |
| product quality (L15) | worker quality (J81) |
| worker quality measures (J24) | product quality measures (L15) |
| average education effect (I24) | product quality (L15) |