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Do wages reflect productivity?

Abstract:
We investigate wage and productivity profiles in the Ghanaian Manufacturing sector using matched firm and worker data. Following Medoff and Abraham (1980, 1981), we use performance appraisal as our measure of individual productivity. Controlling for a wide range of human capital variables, including cognitive skills, we find that on average wage profiles do reflect productivity profiles. However, wages are steeper in large and unionized firms. This suggests that human capital theory holds for small and non-unionized firms, but that not hold for large and unionized companies.
Publication status:
Published

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Publisher:
University of Oxford
Series:
Department of Economics Discussion Paper Series
Publication date:
2005-10-01
Paper number:
GPRG-WPS-029


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Pubs id:
1144182
Local pid:
pubs:1144182
Deposit date:
2020-12-15

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