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Comparing Real Wages

Orley Ashenfelter

Princeton University - Industrial Relations Section; National Bureau of Economic Research (NBER); Institute for the Study of Labor (IZA)

April 2012

NBER Working Paper No. w18006

A real wage rate is a nominal wage rate divided by the price of a good and is a transparent measure of how much of the good an hour of work buys. It provides an important indicator of the living standards of workers, and also of the productivity of workers. In this paper I set out the conceptual basis for such measures, provide some historical examples, and then provide my own preliminary analysis of a decade long project designed to measure the wages of workers doing the same job in over 60 countries--workers at McDonald's restaurants. The results demonstrate that the wage rates of workers using the same skills and doing the same jobs differ by as much as 10 to 1, and that these gaps declined over the period 2000-2007, but with much less progress since the Great Recession.

Number of Pages in PDF File: 47

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Date posted: April 21, 2012  

Suggested Citation

Ashenfelter, Orley, Comparing Real Wages (April 2012). NBER Working Paper No. w18006. Available at SSRN: https://ssrn.com/abstract=2042991

Contact Information

Orley C. Ashenfelter (Contact Author)
Princeton University - Industrial Relations Section ( email )
Princeton, NJ 08544-2098
United States
609-258-4040 (Phone)
609-258-2907 (Fax)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Institute for the Study of Labor (IZA)
P.O. Box 7240
Bonn, D-53072

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