A Simple Test of the Efficiency Wage Hypothesis Revisited

Parsis Dastani, Francois Laisney and Sophie Vouillaume

No 97-23, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: Gerlach and Stephan (1994) proposed a test based on the idea that the wage premium, the part of the wage which is not explained by the stock of human capital, should help predict variables such as career expectations (quit, change occupation, leave the labour force) and some job characteristics (like degree of supervision). We examine a number of issues related to sample selection and split, as well as the choice of tenure and experience variables, and obtain surprisingly robust results, which differ somewhat from theirs: in particular, we find no effect of the wage premium on career expectations. The main source of these differences appears to lie in the pooling of Germans and foreigners.

Keywords: Efficiency wages; wage equations (search for similar items in EconPapers)
JEL-codes: E24 J41 (search for similar items in EconPapers)
Date: 1997
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:9723

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