Do Wages reflect Productivity?

Pieter Serneels

No GPRG-WPS-029, Economics Series Working Papers from University of Oxford, Department of Economics

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.

Keywords: Wage Profile; Individual Productivity; Performance Appraisal (search for similar items in EconPapers)
JEL-codes: J24 J31 (search for similar items in EconPapers)
Date: 2005-10-01
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Citations: View citations in EconPapers (3)

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