Labour Quality and Wage Differentials

This paper presents a quality theory for labour. Analytical solutions for the equilibrium demand for labour quality equation and the equilibrium wage equation are computed. Wage differentials can be explained by variations in labour quality. A method that yields consistent estimates for all the para...

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Bibliographic Details
Published in:Scottish journal of political economy 1998-05, Vol.45 (2), p.188-197
Main Author: Giannias, Dimitrios A.
Format: Article
Language:English
Subjects:
Economic models
Equilibrium
Labor market
Labour
Labour demand
Quality of work
Studies
Wage differential
Wage differentials
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Summary:This paper presents a quality theory for labour. Analytical solutions for the equilibrium demand for labour quality equation and the equilibrium wage equation are computed. Wage differentials can be explained by variations in labour quality. A method that yields consistent estimates for all the parameters of the equilibrium demand for labour quality equation, the labour quality index equation, and the equilibrium wage equation is also presented. To illustrate the methodology an application is presented that focuses on the market for seminars and the wages and quality characteristics of trainers.
ISSN:0036-9292
1467-9485
DOI:10.1111/1467-9485.00089