IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/2176.html
   My bibliography  Save this paper

Carrots and Sticks: Pay, Supervision and Turnover

Author

Listed:
  • Jonathan S. Leonard

Abstract

Large and persistent differences across industries in wages paid for given occupations have commonly been observed. Recently, the efficiency wage model (EWM) has been advanced as an explanation for these wage differentials. The shirking version of the EWM assumes a trade-off between self-supervision and external supervision. The turnover version assumes turnover is costly to the firm. Variation across firms in the cost of monitoring/shirking or turnover then are hypothesized to account for wage variation across firms for homogeneous workers. This paper presents empirical evidence of the trade-off of wage premiums for supervisory intensity and turnover. A new sample of 200 firms in one sector in one state in 1982 is analyzed. Little evidence is found to support either version of EWM. The substantial variation in wages for narrowly defined occupations across firms remains largely unexplained.

Suggested Citation

  • Jonathan S. Leonard, 1987. "Carrots and Sticks: Pay, Supervision and Turnover," NBER Working Papers 2176, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:2176
    Note: LS
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w2176.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Brown, Charles & Medoff, James, 1989. "The Employer Size-Wage Effect," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1027-1059, October.
    2. Abraham, Katharine G & Farber, Henry S, 1987. "Job Duration, Seniority, and Earnings," American Economic Review, American Economic Association, vol. 77(3), pages 278-297, June.
    3. Cain, Glen G, 1976. "The Challenge of Segmented Labor Market Theories to Orthodox Theory: A Survey," Journal of Economic Literature, American Economic Association, vol. 14(4), pages 1215-1257, December.
    Full references (including those not matched with items on IDEAS)

    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. Jing Wang & Morley Gunderson & David Wicks, 2018. "The Earnings Effect of Sexual Orientation: British Evidence from Worker‐Firm Matched Data," British Journal of Industrial Relations, London School of Economics, vol. 56(4), pages 744-769, December.
    2. John M. Abowd & Francis Kramarz, 1998. "Internal and External Labor Markets: An Analysis of Matched Longitudinal Employer-Employee Data," NBER Chapters, in: Labor Statistics Measurement Issues, pages 357-370, National Bureau of Economic Research, Inc.
    3. Robert M. Hutchens, 1993. "Avoiding a Future of Unemployment and Low Wages: What Opportunities Are Open to Young Unskilled Workers?," Economics Working Paper Archive wp_100, Levy Economics Institute.
    4. Simon D Woodcock, 2002. "Agent Heterogeneity and Learning: An Application to Labor Markets," Longitudinal Employer-Household Dynamics Technical Papers 2002-20, Center for Economic Studies, U.S. Census Bureau.
    5. John M. Abowd & Francis Kramarz & Claude Jessua, 1996. "Les politiques salariales : individus et entreprises," Revue Économique, Programme National Persée, vol. 47(3), pages 611-622.
    6. Carlos Humberto Ortiz & José Ignacio Uribe & Érika Raquel Badillo, 2009. "Segmentación inter e intrarregional en el mercado laboral urbano de Colombia, 2001-2006," Revista ESPE - Ensayos Sobre Política Económica, Banco de la República, vol. 27(58), pages 194-231, August.
    7. Sessions, John G., 2008. "Wages, supervision and sharing," The Quarterly Review of Economics and Finance, Elsevier, vol. 48(4), pages 653-672, November.
    8. Beatriz Muriel Hernández, 2016. "An Analysis of Firm Characteristics as Earnings Determinants: The Urban Bolivia Case," Development Research Working Paper Series 04/2016, Institute for Advanced Development Studies.
    9. Soonae Park & Byung-Yeon Kim & Wonchang Jang & Kyung-Min Nam, 2014. "Imperfect information and labor market bias against small and medium-sized enterprises: a Korean case," Small Business Economics, Springer, vol. 43(3), pages 725-741, October.
    10. Jaime Arellano-Bover, 2024. "Career Consequences of Firm Heterogeneity for Young Workers: First Job and Firm Size," Journal of Labor Economics, University of Chicago Press, vol. 42(2), pages 549-589.
    11. Nuno Crespo & Nádia Simões & José Castro Pinto, 2013. "Determinant factors of job quality in Europe," Working Papers Series 2 13-01, ISCTE-IUL, Business Research Unit (BRU-IUL).
    12. José Ignacio Uribe & Carlos Humberto Ortiz & Gustavo Adolfo García, 2007. "La segmentación del mercado laboral colombiano en la década de los noventa," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 9(16), pages 189-221, January-J.
    13. Lawrence F. Katz, 1986. "Efficiency Wage Theories: A Partial Evaluation," NBER Chapters, in: NBER Macroeconomics Annual 1986, Volume 1, pages 235-290, National Bureau of Economic Research, Inc.
    14. Robert M. Hutchens, "undated". "A Path to Good Jobs? Unemployment and Low Wages: The Distribution of Opportunity for Young Unskilled Workers," Economics Public Policy Brief Archive 11, Levy Economics Institute.
    15. Ambra Poggi, 2007. "Do Satisfactory Working Conditions Contribute to Explaining Earning Differentials in Italy? A Panel Data Approach," LABOUR, CEIS, vol. 21(4‐5), pages 713-733, December.
    16. Barth, Erling, 1992. "Why Do Some Firms Pay More? An Empirical Investigation of Inter-Firm Wage Differentials," Institute for Research on Labor and Employment, Working Paper Series qt7f18t2vt, Institute of Industrial Relations, UC Berkeley.
    17. Yamaguchi, Shintaro, 2010. "The effect of match quality and specific experience on career decisions and wage growth," Labour Economics, Elsevier, vol. 17(2), pages 407-423, April.
    18. Ghosh, Suman, 2007. "Job mobility and careers in firms," Labour Economics, Elsevier, vol. 14(3), pages 603-621, June.
    19. Kelly D. Edmiston, 2007. "The role of small and large businesses in economic development," Economic Review, Federal Reserve Bank of Kansas City, vol. 92(Q II), pages 73-97.
    20. Mahmood Araï & Gérard Ballot & Ali Skalli, 1996. "Différentiels intersectoriels de salaire et caractéristiques des employeurs en France," Économie et Statistique, Programme National Persée, vol. 299(1), pages 37-58.

    More about this item

    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:nbr:nberwo:2176. 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: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.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.