IDEAS home Printed from https://ideas.repec.org/a/ula/econom/v37y2012i33p107-142.html
   My bibliography  Save this article

Stocasthic frontiers and wage inefficiency in Venezuela

Author

Listed:
  • Pedro Harmath

    (Universidad Centroccidental Lisandro Alvarado, Decanato de Ciencias y Tecnología, Departamento de Investigación de Operaciones y Estadística, Núcleo Obelisco, Avenida Las Industrias, Barquisimeto estado Lara, Venezuela.)

  • Josefa Ramoni

    (Universidad de Los Andes, Facultad de Ciencias Económicas y Sociales, Departamento de Economía, Núcleo Liria, Edificio H, Piso 3, Mérida, estado Mérida, Venezuela.)

Abstract

This paper analyzes wage inefficiency in Venezuela in 2006 based on the methodology of stochastic frontiers. Empirical results indicate that employers’ inefficiency is above 30%, while for employees inefficiency is not statistical significant. This can be explained by government role in the labor market and by the fact that employers may be paying efficiency wages to increase productivity.

Suggested Citation

  • Pedro Harmath & Josefa Ramoni, 2012. "Stocasthic frontiers and wage inefficiency in Venezuela," Economía, Instituto de Investigaciones Económicas y Sociales (IIES). Facultad de Ciencias Económicas y Sociales. Universidad de Los Andes. Mérida, Venezuela, vol. 37(33), pages 107-142, January-J.
    • Handle: RePEc:ula:econom:v:37:y:2012:i:33:p:107-142
    as

    Download full text from publisher

    File URL: ftp://iies.faces.ula.ve/Pdf/Revista33/Rev33Harmath.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Juan Miguel VILLA LORA, 2006. "Propuesta para la estimación del salario de reserva de los empleados en Colombia con el análisis de fronteras estocásticas," Archivos de Economía 3402, Departamento Nacional de Planeación.
    2. Solomon W. Polachek & Jun (Jeff) Xiang, 2006. "The Effects of Incomplete Employee Wage Information: A Cross-Country Analysis," Research in Labor Economics, in: The Economics of Immigration and Social Diversity, pages 35-75, Emerald Group Publishing Limited.
    3. Polachek, Solomon W & Yoon, Bong Joon, 1996. "Panel Estimates of a Two-Tiered Earnings Frontier," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 11(2), pages 169-178, March-Apr.
    4. Polachek, Solomon W & Yoon, Bong Joon, 1987. "A Two-tiered Earnings Frontier Estimation of Employer and Employee Information in the Labor Market," The Review of Economics and Statistics, MIT Press, vol. 69(2), pages 296-302, May.
    5. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Solomon W. Polachek, 2017. "Heterogeneity in the Labor Market: Ability and Information Acquisition," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 43(3), pages 377-390, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Vera A. Adamchik & Arthur E. King, 2007. "Labor Market Efficiency In Poland: A Stochastic Wage Frontier Analysis," The International Journal of Business and Finance Research, The Institute for Business and Finance Research, vol. 1(2), pages 41-50.
    2. Vera A. Adamchik & Josef C. Brada & Arthur E. King, 2009. "Are Transition Economy Workers Underpaid?," Working Papers 278, Leibniz Institut für Ost- und Südosteuropaforschung (Institute for East and Southeast European Studies).
    3. Partha Gangopadhyay & Sriram Shankar, 2016. "Labour (im)mobility and monopsonistic exploitation of workers in the urban informal sector: Lessons from a field study," Urban Studies, Urban Studies Journal Limited, vol. 53(5), pages 1042-1060, April.
    4. Solomon W. Polachek & Jun (Jeff) Xiang, 2006. "The Effects of Incomplete Employee Wage Information: A Cross-Country Analysis," Research in Labor Economics, in: The Economics of Immigration and Social Diversity, pages 35-75, Emerald Group Publishing Limited.
    5. M. Ángeles Díaz & Rosario Sánchez, 2013. "Young Workers, Marital Status And Wage Gap," Revista de Economia Aplicada, Universidad de Zaragoza, Departamento de Estructura Economica y Economia Publica, vol. 21(1), pages 57-70, Spring.
    6. Christopher F. Parmeter, 2018. "Estimation of the two-tiered stochastic frontier model with the scaling property," Journal of Productivity Analysis, Springer, vol. 49(1), pages 37-47, February.
    7. Solomon Polachek, 2003. "Mincer's Overtaking Point and the Life Cycle Earnings Distribution," Review of Economics of the Household, Springer, vol. 1(4), pages 273-304, December.
    8. Leonardo Becchetti & Giovanni Trovato, 2011. "Corporate social responsibility and firm efficiency: a latent class stochastic frontier analysis," Journal of Productivity Analysis, Springer, vol. 36(3), pages 231-246, December.
    9. John Robst & Kimmarie McGOLDRICK, 1999. "The Measurement of Firm Information About Product Demand," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 15(2), pages 149-163, September.
    10. Ogloblin, Constantin & Brock, Gregory, 2005. "Wage determination in urban Russia: Underpayment and the gender differential," Economic Systems, Elsevier, vol. 29(3), pages 325-343, September.
    11. Polachek, Solomon W. & Robst, John, 1998. "Employee labor market information: comparing direct world of work measures of workers' knowledge to stochastic frontier estimates," Labour Economics, Elsevier, vol. 5(2), pages 231-242, June.
    12. German Blanco, 2017. "Who benefits from job placement services? A two-sided analysis," Journal of Productivity Analysis, Springer, vol. 47(1), pages 33-47, February.
    13. Poggi, Ambra, 2010. "Job satisfaction, working conditions and aspirations," Journal of Economic Psychology, Elsevier, vol. 31(6), pages 936-949, December.
    14. Stefano Caiazza & Alberto Franco Pozzolo & Giovanni Trovato, 2016. "Bank efficiency measures, M&A decision and heterogeneity," Journal of Productivity Analysis, Springer, vol. 46(1), pages 25-41, August.
    15. Constantin Ogloblin & Gregory Brock, 2006. "Wage Determination in Rural Russia: A Stochastic Frontier Model," Post-Communist Economies, Taylor & Francis Journals, vol. 18(3), pages 315-326.
    16. Shao, Wen-Chao & Zhang, Han & Chou, Li-Chen & Ye, Xi-Xi, 2023. "Comparing athletes’ mastery of salary information before and during the COVID-19 pandemic: Evidence from the national basketball association," Economic Modelling, Elsevier, vol. 128(C).
    17. Ma Ángeles Díaz & Rosario Sánchez, 2011. "Gender and potential wage in Europe: a stochastic frontier approach," International Journal of Manpower, Emerald Group Publishing Limited, vol. 32(4), pages 410-425, July.
    18. Khalid Maman Waziri, 2017. "Generalized Glass Ceilings in the United States – A Stochastic Metafrontier Approach," Working Papers halshs-01569834, HAL.
    19. Tsionas, Efthymios G., 2012. "Maximum likelihood estimation of stochastic frontier models by the Fourier transform," Journal of Econometrics, Elsevier, vol. 170(1), pages 234-248.
    20. Banfi, Silvia & Filippini, Massimo, 2010. "Resource rent taxation and benchmarking--A new perspective for the Swiss hydropower sector," Energy Policy, Elsevier, vol. 38(5), pages 2302-2308, May.

    More about this item

    Keywords

    Stochastic frontiers; wages; labor market.;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ula:econom:v:37:y:2012:i:33:p:107-142. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Alexis Vásquez (email available below). General contact details of provider: https://edirc.repec.org/data/iiulave.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.