What's wrong with forced wage compression? The fair wage hypothesis redux

What's wrong with forced wage compression? The fair wage hypothesis redux

In this note we examine a modified version of Akerlof and Yellen's [Q. J. Econ. 105 (1990) 255] fair wage hypothesis where individuals care about the wages of workers above as well as below them in the wage distribution. We find that this modified fair wage model is consistent with existing evi...

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Veröffentlicht in:Economics letters 2004-06, Vol.83 (3), p.391-398
Hauptverfasser: Alexopoulos, Michelle, Cohen, Jon
Format: Artikel
Sprache:eng
Schlagworte:
Economic efficiency
Economics
Efficiency wages
Equality
Fairness
Wage compression
Wage differentials
Wages
Workers
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Zusammenfassung:In this note we examine a modified version of Akerlof and Yellen's [Q. J. Econ. 105 (1990) 255] fair wage hypothesis where individuals care about the wages of workers above as well as below them in the wage distribution. We find that this modified fair wage model is consistent with existing evidence about the reaction of workers and firms to forced wage compression from below.
ISSN:0165-1765
1873-7374
DOI:10.1016/j.econlet.2003.12.017