Efficiency Wages and the Wage Structure

62 Pages Posted: 29 Dec 2000

See all articles by Alan B. Krueger

Alan B. Krueger

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

Lawrence H. Summers

Harvard University; National Bureau of Economic Research (NBER); Harvard University - Harvard Kennedy School (HKS)

Date Written: June 1986

Abstract

This paper examines differences in pay for equally skilled workers indifferent industries. The major finding is that there is substantialdispersion in wages across industries, even after allowing for measured andunmeasured labor quality, working conditions, fringe benefits, transitorydemand shocks, threat of unionization, union bargaining power, firm size andother factors. Some direct evidence in favor of efficiency wage theories ispresented. The evidence suggests that industry wage differentials aresuccessful in eliciting better performance through reduced turnover andincreased effort.

Suggested Citation

Krueger, Alan B. and Summers, Lawrence H., Efficiency Wages and the Wage Structure (June 1986). NBER Working Paper No. w1952. Available at SSRN: https://ssrn.com/abstract=237138

Alan B. Krueger (Contact Author)

Princeton University - Industrial Relations Section ( email )

Princeton, NJ 08544-2098
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National Bureau of Economic Research (NBER)

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IZA Institute of Labor Economics

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Lawrence H. Summers

Harvard University ( email )

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Cambridge, MA 02138
United States
617-495-1502 (Phone)
617-495-8550 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States

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