[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/6626.html
   My bibliography  Save this paper

Efforts and Wages: A New Look at the Inter-Industry Wage Differentials

Author

Listed:
  • Edward E. Leamer
  • Christopher Thornberg
Abstract
We provide evidence that US workers face a wage-effort offer curve with the high-wage high-effort jobs occurring in the capital intensive sectors. We find that real wage offers rose at every level of effort during the 1960's, a shift which is consistent with a decline in the rental cost of capital. During the 1970's, when relative prices of labor-intensive goods declined, the wage-effort offer curve twisted, offering lower pay for the low-paid jobs in the labor-intensive sectors but higher pay for the high-paid jobs in the capital-intensive sectors. In the 1980's, workers at every wage level began to work more hours for the same weekly wage. This we loosely attribute either to the increasing cost of non-wage benefits, especially health care, or to the introduction of new equipment. In studying the wage-effort offer curve rate of unionization, education, and rent sharing.

Suggested Citation

  • Edward E. Leamer & Christopher Thornberg, 1998. "Efforts and Wages: A New Look at the Inter-Industry Wage Differentials," NBER Working Papers 6626, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:6626
    Note: LS
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w6626.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Abowd, John M & Card, David, 1987. "Intertemporal Labor Supply and Long-term Employment Contracts," American Economic Review, American Economic Association, vol. 77(1), pages 50-68, March.
    2. Deardorff, Alan V & Stafford, Frank P, 1976. "Compensation of Cooperating Factors," Econometrica, Econometric Society, vol. 44(4), pages 671-684, July.
    3. Leonardo Auernheimer & Beatriz Rumbos, 1997. "Variable Capital Utilization in a General Equilibrium, "Supply Side" Model," Working Papers 9704, Centro de Investigacion Economica, ITAM.
    4. Lindsay, C M, 1971. "Measuring Human Capital Returns," Journal of Political Economy, University of Chicago Press, vol. 79(6), pages 1195-1215, Nov.-Dec..
    5. Lundberg, Shelly J, 1988. "Labor Supply of Husbands and Wives: A Simultaneous Equations Approach," The Review of Economics and Statistics, MIT Press, vol. 70(2), pages 224-235, May.
    6. Bernanke, Ben S, 1986. "Employment, Hours, and Earnings in the Depression: An Analysis of EightManufacturing Industries," American Economic Review, American Economic Association, vol. 76(1), pages 82-109, March.
    7. Abowd, John M & Card, David, 1989. "On the Covariance Structure of Earnings and Hours Changes," Econometrica, Econometric Society, vol. 57(2), pages 411-445, March.
    8. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-444, June.
    9. Walter Y. Oi, 1962. "Labor as a Quasi-Fixed Factor," Journal of Political Economy, University of Chicago Press, vol. 70(6), pages 538-538.
    10. Calvo, Guillermo A, 1975. "Efficient and Optimal Utilization of Capital Services," American Economic Review, American Economic Association, vol. 65(1), pages 181-186, March.
    11. Biddle, Jeff E & Zarkin, Gary A, 1989. "Choice among Wage-Hours Packages: An Empirical Investigation of Male Labor Supply," Journal of Labor Economics, University of Chicago Press, vol. 7(4), pages 415-437, October.
    12. Barry T. Hirsch & David A. Macpherson, 1993. "Union Membership and Coverage Files from the Current Population Surveys: Note," ILR Review, Cornell University, ILR School, vol. 46(3), pages 574-578, April.
    13. Moffitt, Robert, 1984. "The Estimation of a Joint Wage-Hours Labor Supply Model," Journal of Labor Economics, University of Chicago Press, vol. 2(4), pages 550-566, October.
    14. William T. Dickens & Lawrence F. Katz, 1986. "Interindustry Wage Differences and Industry Characteristics," NBER Working Papers 2014, National Bureau of Economic Research, Inc.
    15. Rosen, Sherwin, 1969. "On the Interindustry Wage and Hours Structure," Journal of Political Economy, University of Chicago Press, vol. 77(2), pages 249-273, March/Apr.
    16. Yoram Barzel, 1973. "The Determination of Daily Hours and Wages," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 87(2), pages 220-238.
    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. Laura Policardo & Lionello F. Punzo & Edgar J. Sanchez Carrera, 2019. "On the wage–productivity causal relationship," Empirical Economics, Springer, vol. 57(1), pages 329-343, July.
    2. Avraham Ebenstein & Ann Harrison & Margaret McMillan & Shannon Phillips, 2022. "Estimating The Impact Of Trade And Offshoring On American Workers Using The Current Population Surveys," World Scientific Book Chapters, in: Globalization, Firms, and Workers, chapter 12, pages 275-289, World Scientific Publishing Co. Pte. Ltd..
    3. Edward E. Leamer, 2010. "What Have Changes to the Global Markets for Goods and Services Done to the Viability of the Swedish Welfare State?," NBER Chapters, in: Reforming the Welfare State: Recovery and Beyond in Sweden, pages 285-325, National Bureau of Economic Research, Inc.
    4. Edinaldo Tebaldi & Jongsung Kim, 2010. "Two Tales on the Returns to Education: The Impact of Trade on Wages," Review of Development Economics, Wiley Blackwell, vol. 14(4), pages 768-782, November.
    5. Yih-Chyi Chuang & Pi-Fum Hsu, 2004. "FDI, trade, and spillover efficiency: evidence from China's manufacturing sector," Applied Economics, Taylor & Francis Journals, vol. 36(10), pages 1103-1115.
    6. Thomas Moutos & William Scarth, 2002. "Technical Change and Unemployment: Policy Responses and Distributional Considerations," CESifo Working Paper Series 710, CESifo.
    7. Robbins, Donald J., 2003. "The impact of trade liberalization upon inequality in developing countries : a review of theory and evidence," ILO Working Papers 993650553402676, International Labour Organization.
    8. Lutz Altenburg & Anke Brenken, 2008. "Effort, trade, and unemployment," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 41(3), pages 864-893, August.
    9. repec:ilo:ilowps:365055 is not listed on IDEAS
    10. Wang, Yongjin & Zhao, Laixun, 2015. "Saving good jobs from global competition by rewarding quality and efforts," Journal of International Economics, Elsevier, vol. 96(2), pages 426-434.

    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. Joseph G. Altonji & Emiko Usui, 2007. "Work Hours, Wages, and Vacation Leave," ILR Review, Cornell University, ILR School, vol. 60(3), pages 408-428, April.
    2. Wolf, Elke, 2002. "Lower wage rates for fewer hours? A simultaneous wage-hours model for Germany," Labour Economics, Elsevier, vol. 9(5), pages 643-663, November.
    3. Richard Blundell & Mike Brewer & Marco Francesconi, 2008. "Job Changes and Hours Changes: Understanding the Path of Labor Supply Adjustment," Journal of Labor Economics, University of Chicago Press, vol. 26(3), pages 421-453, July.
    4. Devicienti, Francesco & Grinza, Elena & Vannoni, Davide, 2020. "Why do firms (dis)like part-time contracts?," Labour Economics, Elsevier, vol. 65(C).
    5. Elise Gould, 2004. "Decomposing the effects of children's health on mother's labor supply: is it time or money?," Health Economics, John Wiley & Sons, Ltd., vol. 13(6), pages 525-541, June.
    6. Alexander Bick & Adam Blandin & Richard Rogerson, 2022. "Hours and Wages," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 137(3), pages 1901-1962.
    7. Ladislav Suhányi & Alžbeta Suhányiová & Jaroslava Kádárová & Jaroslava Janeková, 2023. "Relationships between Average Wages in the Manufacturing Sector and Economic Indicators of the Manufacturing Sector in the Region of Visegrad Group Countries," Sustainability, MDPI, vol. 15(5), pages 1-19, February.
    8. Martinez-Granado, Maite, 2005. "Testing labour supply and hours constraints," Labour Economics, Elsevier, vol. 12(3), pages 321-343, June.
    9. Schrenker, Annekatrin, 2023. "Do women expect wage cuts for part-time work?," Labour Economics, Elsevier, vol. 80(C).
    10. Elke Wolf, 2014. "The German Part-Time Wage Gap: Bad News for Men," SOEPpapers on Multidisciplinary Panel Data Research 663, DIW Berlin, The German Socio-Economic Panel (SOEP).
    11. René Böheim & Mark P. Taylor, 2004. "Actual and Preferred Working Hours," British Journal of Industrial Relations, London School of Economics, vol. 42(1), pages 149-166, March.
    12. Richard Blundell & Mike Brewer & Marco Francesconi, 2005. "Job changes, hours changes and the path of labour supply adjustment," IFS Working Papers W05/21, Institute for Fiscal Studies.
    13. René Böheim & Mark P. Taylor, 2003. "Option Or Obligation? The Determinants Of Labour Supply Preferences In Britain," Manchester School, University of Manchester, vol. 71(2), pages 113-131, March.
    14. Erica L. Groshen, 1988. "Why do wages vary among employers?," Economic Review, Federal Reserve Bank of Cleveland, vol. 24(Q I), pages 19-38.
    15. Joseph Altonji & Jennifer Oldham, 2003. "Vacation laws and annual work hours," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 27(Q III), pages 19-29.
    16. Daniel Aaronson & Eric French, 2009. "The Effects of Progressive Taxation on Labor Supply when Hours and Wages Are Jointly Determined," Journal of Human Resources, University of Wisconsin Press, vol. 44(2).
    17. repec:eee:labchp:v:3:y:1999:i:pb:p:2291-2372 is not listed on IDEAS
    18. Annekatrin Schrenker, 2022. "Do Women Expect Wage Cuts for Part-time Work?," Discussion Papers of DIW Berlin 2024, DIW Berlin, German Institute for Economic Research.
    19. Wolf, Elke, 2013. "The German part-time wage gap: bad news for men," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79969, Verein für Socialpolitik / German Economic Association.
    20. Edward E. Leamer, 1999. "Effort, Wages, and the International Division of Labor," Journal of Political Economy, University of Chicago Press, vol. 107(6), pages 1127-1162, December.
    21. Laisney, François & Pohlmeier, Winfried & Staat, Matthias, 1991. "Estimation of labour supply functions using panel data: a survey," ZEW Discussion Papers 91-05, ZEW - Leibniz Centre for European Economic Research.

    More about this item

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts

    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:6626. 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.