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Nutrition, Dependants and the Mode of Wage Payment

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  • Gupta, Manash Ranjan

Abstract

This paper develops a model based on the "consumption efficiency" hypothesis of H. Leibenstein (1957) and shows the following: (1) it is profitable for the employer to pay the workers a combination of cash and meals, rather than to pay only in cash, when the workers have dependants; (2) the possibility of an excess applicant's equilibrium does not arise in this case; (3) the unit cost of labor (in efficiency units) is minimized in equilibrium; and (4) the proportions of wage payment in the form of meals falls as the worker's expected income from alternative employment rises. Copyright 1989 by Royal Economic Society.

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  • Gupta, Manash Ranjan, 1989. "Nutrition, Dependants and the Mode of Wage Payment," Oxford Economic Papers, Oxford University Press, vol. 41(4), pages 737-748, October.
    • Handle: RePEc:oup:oxecpp:v:41:y:1989:i:4:p:737-48
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    Cited by:

    1. Banerji, Sanjay & Gupta, Manas Ranjan, 1997. "The efficiency wage given long-run employment and concave labor constraint," Journal of Development Economics, Elsevier, vol. 53(1), pages 185-195, June.
    2. Platteau, Jean-Philippe, 1995. "A framework for the analysis of evolving patron-client ties in agrarian economies," World Development, Elsevier, vol. 23(5), pages 767-786, May.

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