Working Paper: NBER ID: w1952
Authors: Alan B. Krueger; Lawrence H. Summers
Abstract: This paper examines differences in pay for equally skilled workers in \ndifferent industries. The major finding is that there is substantial \ndispersion in wages across industries, even after allowing for measured and \nunmeasured labor quality, working conditions, fringe benefits, transitory \ndemand shocks, threat of unionization, union bargaining power, firm size and \nother factors. Some direct evidence in favor of efficiency wage theories is \npresented. The evidence suggests that industry wage differentials are \nsuccessful in eliciting better performance through reduced turnover and \nincreased effort.
Keywords: efficiency wages; wage differentials; labor market
JEL Codes: J31; J33
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| industry characteristics (L81) | wage differentials (J31) |
| wage levels (J31) | worker performance (J29) |
| higher wages (J39) | reduced turnover (J63) |
| higher wages (J39) | increased effort (D29) |
| human capital variables (J24) | wage dispersion (J31) |
| industry (L89) | wage outcomes (J31) |
| compensating differentials (J31) | wage differentials (J31) |
| union effects (J51) | wage differentials (J31) |