Manufacturing workers private wage supplements: a simultaneous equations approach

Workers demand various supplements to their money wage such as pensions, health and accident insurance, and other benefit funds. Reasons for these supplement demands include: 1. income effects, 2. price effects produced by preferential tax treatment and scale economies, and 3. unionization intermixe...

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Bibliographic Details
Published in:Applied economics 1983-06, Vol.15 (3), p.363-378
Main Author: Alpert, William T.
Format: Article
Language:English
Subjects:
Compensation
Economic models
Employee benefits
Manufacturing
Mathematical analysis
Studies
Wages & salaries
Workers
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Summary:Workers demand various supplements to their money wage such as pensions, health and accident insurance, and other benefit funds. Reasons for these supplement demands include: 1. income effects, 2. price effects produced by preferential tax treatment and scale economies, and 3. unionization intermixed with other variables. Office worker subsamples also provide support for the hypothesis of monopoly wage supplement. Not only do firms with market power pay higher ratios of supplements to compensation, but unions and market power act separately to enhance these ratios. The assumption of proportionality between wages and supplements is proved false. Rather, the distribution of wage differentials is substantially affected by the consideration of supplements. The errors created by supplement omission increase with earnings levels. While the determinants of supplements across subsamples are very similar, their magnitudes may differ considerably.
ISSN:0003-6846
1466-4283
DOI:10.1080/00036848300000007