Efficiency wages and the German wage curve

Abstract

"The paper is an attempt to test whether there is a wage curve in western Germany and if so whether it might be explained by efficiency-wage forces. Such a theory makes two predictions. First, where the degree of supervision is low, wages will be high. Second, where the degree of supervision is low, the unemployment elasticity of pay will be high. The German Socioeconomic Panel is one of the few data sets that records information about the degree of supervision. Using these data, we find that the first prediction is accepted and the second prediction is rejected. Our broad judgement is that there is a German wage curve with an elasticity of approximately -0.1, but that the results are not strongly supportive of an efficiency-wage explanation for its existence." (Author's abstract, IAB-Doku) ((en))

Cite article

Blanchflower, D. & Oswald, A. (1996): Effizienzentlohnung und die deutsche Lohnkurve. In: Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Vol. 29, No. 3, p. 460-466.