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Article
Publication date: 4 May 2012

Chor Foon Tang

The aim of this study is to empirically investigate the effect of real wages on labour productivity in Malaysia's manufacturing sector using annual data from 1980 to 2009.

Abstract

Purpose

The aim of this study is to empirically investigate the effect of real wages on labour productivity in Malaysia's manufacturing sector using annual data from 1980 to 2009.

Design/methodology/approach

This study uses the Johansen cointegration test to examine the presence of long‐run equilibrium relationship between labour productivity and real wages in Malaysia. In addition, the Granger causality test within the vector error‐correction model (VECM) is used to ascertain the direction of causality between the variables of interest.

Findings

The Johansen test suggests that real wages and labour productivity are cointegrated. Moreover, labour productivity and real wages have a quadratic relationship (i.e. inverted U‐shaped curve) instead of linear relationship. Hence, the effect of real wages on labour productivity is non‐monotonic. Furthermore, the Granger causality test indicates that real wages and labour productivity are bilateral causality in nature.

Research limitations/implications

This study is limited to the labour productivity in the manufacturing sector only.

Originality/value

This study demonstrates that the effect of real wages on labour productivity is non‐monotonic; hence increase in real wages alone does not always enhance labour productivity. Thus, other incentives should be offered to stimulate long‐term labour productivity growth in Malaysia.

Details

International Journal of Social Economics, vol. 39 no. 6
Type: Research Article
ISSN: 0306-8293

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Article
Publication date: 1 November 1995

Carl M. Campbell

Investigates the effects on quits of the current level of wages andthe change in wages in order to test the proposition that the change inwages has a negative impact on…

Abstract

Investigates the effects on quits of the current level of wages and the change in wages in order to test the proposition that the change in wages has a negative impact on quits, even controlling for the current level of wages. Finds that the percentage deviation in a worker′s wage change from its predicted level has an effect on quits that is three to six times stronger than the effect of the percentage deviation in a worker′s current wage from its predicted level. Claims this result may have implications for the behaviour of firms in setting wages and in the behaviour of wages over the business cycle.

Details

International Journal of Manpower, vol. 16 no. 9
Type: Research Article
ISSN: 0143-7720

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Article
Publication date: 29 October 2020

Lixin Cai

The purpose of this study is to examine the effects of health on wages of Australian workers, with a focus on gender differences and the role of macroeconomic conditions…

Abstract

Purpose

The purpose of this study is to examine the effects of health on wages of Australian workers, with a focus on gender differences and the role of macroeconomic conditions in the effects.

Design/methodology/approach

The first 15 waves of the Household, Income and Labour Dynamics in Australia survey are used to estimate a wage model that accounts for the endogeneity of health, unobserved heterogeneity and sample selection bias.

Findings

The results show that, after accounting for the endogeneity of health, unobserved heterogeneity and sample selection bias, better health increases wages for Australian male workers, but not for female workers. The results also show that accounting for the endogeneity of health, unobserved heterogeneity and potential sample selection bias is important in estimating the effects of health on wages. In particular, a simple ordinary least squares estimator would underestimate the effect of health on wages for males, while overestimate it for females, and simply addressing the endogeneity of health using instrumental variables could overestimate the effect for both genders. It is also found that the effects of health on wages fall under depressed macroeconomic conditions, perhaps due to reduced job mobility and increased presentism during a recession.

Originality/value

This study adds to the international literature on the effects of health on wages by providing empirical evidence from Australia. The model applied to estimate the effects takes advantage of a panel dataset to address the bias resulting potentially from all the sources of the endogeneity of health, unobserved heterogeneity and sample selection. The results indeed show that failing to address these issues would substantially bias the estimated effects of health on wages.

Details

International Journal of Manpower, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0143-7720

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Book part
Publication date: 22 April 2015

Paul Caruana-Galizia

This paper constructs real wage series for nineteenth-century Algeria and Tunisia, and compares them with existing Egyptian and Syrian series. Archival sources are used…

Abstract

This paper constructs real wage series for nineteenth-century Algeria and Tunisia, and compares them with existing Egyptian and Syrian series. Archival sources are used for price and nominal wage data. Following Allen (2001), nominal wages are deflated with a consumer price index. The series are tested for robustness. Real wages were initially dispersed, but converged to similar levels by the end of the period. There is no evidence of a broad-based improvement in living standards over the period, with real wage series declining in Algeria, and stagnating in Egypt, Tunisia and Syria. The findings paint a less optimistic picture of living standards compared to other measures like GDP per capita and compared to some of the historical literature. Data for the Maghreb are scarce, and more work will need to be done on finding more wage and price observations.

Details

Research in Economic History
Type: Book
ISBN: 978-1-78441-782-6

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Abstract

Details

The Creation and Analysis of Employer-Employee Matched Data
Type: Book
ISBN: 978-0-44450-256-8

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Book part
Publication date: 29 October 2014

Scott Carter

This chapter argues that the Marxian theory of exploitation underlies the concepts of surplus and deficit industries that appear in Sraffa’s (1960) Production of

Abstract

This chapter argues that the Marxian theory of exploitation underlies the concepts of surplus and deficit industries that appear in Sraffa’s (1960) Production of Commodities by Means of Commodities. This is seen from archival research of the unpublished papers of Piero Sraffa housed at the Wren Library, Trinity College, University of Cambridge. There it is shown that the origin of these concepts lies in the Marxian theory of exploitation that Sraffa developed regarding the notion of the ‘pool of profits’ the Italian economist utilized over a 14-year period from 1942 to 1956. The chapter engages in an extensive textual study of the archival evidence and then presents a simple analytical model of these relations.

Details

Research in Political Economy
Type: Book
ISBN: 978-1-78441-007-0

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Abstract

Details

Panel Data and Structural Labour Market Models
Type: Book
ISBN: 978-0-44450-319-0

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Book part
Publication date: 18 December 2016

David J. Cooper and John P. Lightle

We augment a standard bilateral gift-exchange game to allow employees to communicate their gratitude for, or disapproval toward, the wage assigned to them by their…

Abstract

We augment a standard bilateral gift-exchange game to allow employees to communicate their gratitude for, or disapproval toward, the wage assigned to them by their manager. This provides employees with a means of reciprocation or emotion expression toward the employee which is not available in a standard gift-exchange game and may substitute for the higher-than-equilibrium efforts commonly seen in this environment. We find that employees express gratitude or disapproval according to the wage received, but these messages are not a substitute for monetary reciprocation as the relationship between wages and effort is unchanged. These results suggest that employees view the messages as a form of emotional expression independent from rewarding or punishing managers. Average wage levels are little affected by allowing messages, although wages do fall more over time in the absence of messages and individual managers’ wage choices are affected by the messages they receive.

Details

Experiments in Organizational Economics
Type: Book
ISBN: 978-1-78560-964-0

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Book part
Publication date: 23 November 2020

Tekalign Gutu Sakketa and Nicolas Gerber

Within the framework of potential efforts and strategies to employment generation for young people in Africa in general and Ethiopia in particular, the agricultural sector…

Abstract

Within the framework of potential efforts and strategies to employment generation for young people in Africa in general and Ethiopia in particular, the agricultural sector is increasingly considered as an important sector and a valuable means for poverty reduction, the promotion of economic development, and youth's economic independence. Renewed hope is placed on the sector to offer sustainable livelihood prospects for the rural youth. Yet, the success and sustainability of the sector require a proper understanding of how households allocate youth labor time in the sector and whether agricultural labor supply is responsive to economic incentives such as shadow wages. Using gender- and age-specific plot-level panel data, we systematically analyze the impacts of shadow wages of each household member on youth agricultural labor supply across types of farms. The results indicate that agricultural shadow wages matter for the youth's labor supply in the sector, but the impact differs for male and female youth. We also show that trends and patterns of youth labor supply vary across gender and whether they work on their own farm, and so do their labor returns. The results are consistent after controlling for individual heterogeneity and instrumenting for possible endogeneity. Taking into account the intensity of youth's actual involvement in the family farm, own farm or off-farm work instead of their stated intentions, the results challenge the presumption that youth are abandoning agriculture, at least in agricultural potential areas of Ethiopia. Instead, the frequent narrative of youth disengaging from agriculture may be a result of methodological flaws or data limitations. The findings suggest that it is necessary to invest in agricultural development to enhance labor productivity and employability of young people in agriculture.

Details

Change at Home, in the Labor Market, and On the Job
Type: Book
ISBN: 978-1-83909-933-5

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Book part
Publication date: 5 January 2006

Şevket Pamuk

This study examines the long-term trends in wages of skilled and unskilled construction workers in Constantinople-Istanbul, and to a lesser extent in other urban centers…

Abstract

This study examines the long-term trends in wages of skilled and unskilled construction workers in Constantinople-Istanbul, and to a lesser extent in other urban centers in the Near East and the Balkans from about 1100 until the present. It also compares long-term trends in eastern Mediterranean wages with those elsewhere in Europe. Two events had significant and long-lasting impacts on urban real wages around the eastern Mediterranean during the last millennium: the Black Death and modern economic growth. The available price and wage data also point to the existence of a gap in urban real wages between northwestern Europe and the eastern Mediterranean during the first half of the sixteenth century.

Details

Research in Economic History
Type: Book
ISBN: 978-1-84950-379-2

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