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Is Worker Behaviour Consistent with Efficiency Wages?

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  • Drago, Robert
  • Heywood, John S

Abstract

A model of worker behavior under efficiency wages is presented and the fundamental hypotheses identified. Using survey data from the United States, a cross-sectional testing equation is estimated. While not uniformly successful, the fundamental results emerge as a strong positive partial correlation between reported effort and the wage rate of the employee and between that same effort measure and degree of monitoring. These results, together with a weaker negative partial correlation between reported effort and the chances for reemployment after dismissal, are taken as evidence consistent with the efficiency wage model. Copyright 1992 by Scottish Economic Society.

Suggested Citation

  • Drago, Robert & Heywood, John S, 1992. "Is Worker Behaviour Consistent with Efficiency Wages?," Scottish Journal of Political Economy, Scottish Economic Society, vol. 39(2), pages 141-153, May.
    • Handle: RePEc:bla:scotjp:v:39:y:1992:i:2:p:141-53
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    Citations

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    Cited by:

    1. Meghan Millea, 2002. "Disentangling the wage-productivity relationship: Evidence from select OECD member countries," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 8(4), pages 314-323, November.
    2. K Clark & M Tomlinson, 2001. "The Determinants of Work Effort: Evidence from the Employment in Britain Survey," Economics Discussion Paper Series 0113, Economics, The University of Manchester.
    3. Heywood, John S. & Siebert, W. Stanley & Wei, Xiangdong, 2013. "The Consequences of a Piece Rate on Quantity and Quality: Evidence from a Field Experiment," IZA Discussion Papers 7660, Institute of Labor Economics (IZA).
    4. Uwe Jirjahn, 2006. "A Note on Efficiency Wage Theory and Principal–Agent Theory," Bulletin of Economic Research, Wiley Blackwell, vol. 58(3), pages 235-252, July.
    5. Thalmaier, Anja, 1999. "Bestimmungsgründe von Fehlzeiten: Welche Rolle spielt die Arbeitslosigkeit?," IZA Discussion Papers 62, Institute of Labor Economics (IZA).
    6. Bart Cockx & Matteo Picchio, 2013. "Scarring effects of remaining unemployed for long-term unemployed school-leavers," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 176(4), pages 951-980, October.
    7. Denis Chênevert & Michel Tremblay, 2011. "Between universality and contingency," International Journal of Manpower, Emerald Group Publishing Limited, vol. 32(8), pages 856-878, November.
    8. Agell, Jonas & Bennmarker, Helge, 2002. "Wage policy and endogenous wage rigidity: a representative view from the inside," Working Paper Series 2002:12, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    9. repec:eee:labchp:v:3:y:1999:i:pb:p:2291-2372 is not listed on IDEAS
    10. Lang, Oliver, 1993. "Lohnprämien und Leistungsbereitschaft: Ein latentes Strukturmodell zur empirischen Überprüfung der Shirking-Hypothese," ZEW Discussion Papers 93-17, ZEW - Leibniz Centre for European Economic Research.
    11. Goerke, Laszlo, 1997. "Taxes in an efficiency wage economy," Discussion Papers, Series II 335, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
    12. Fernie, Sue & Metcalf, David, 1998. "(Not)hanging on the telephone: payment systems in the new sweatshops," LSE Research Online Documents on Economics 20275, London School of Economics and Political Science, LSE Library.
    13. Sue Fernie & David Metcalf, 1998. "(Not)Hanging on the Telephone: Payment systems in the New Sweatshops," CEP Discussion Papers dp0390, Centre for Economic Performance, LSE.
    14. Francis Green & Steven McIntosh, 1998. "Union Power, Cost of Job Loss, and Workers' Effort," ILR Review, Cornell University, ILR School, vol. 51(3), pages 363-383, April.
    15. Bagchi Aniruddha & Bandyopadhyay Siddhartha, 2016. "Workplace Deviance and Recession," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 16(1), pages 47-81, January.
    16. Green, Francis & McIntosh, Steven, 2001. "The intensification of work in Europe," Labour Economics, Elsevier, vol. 8(2), pages 291-308, May.
    17. Goerke, Laszlo, 2000. "On the structure of unemployment benefits in shirking models," Labour Economics, Elsevier, vol. 7(3), pages 283-295, May.
    18. Thomas J. Carter, 1999. "Are Wages Too Low? Empirical Implications of Efficiency Wage Models," Southern Economic Journal, John Wiley & Sons, vol. 65(3), pages 594-602, January.

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