Using an extensive dataset on Finnish workers during the years 1990-2002, we analyze the relation between dispersion of wages within plant and average sales per worker. This relation is quadratic when dispersion is conditioned on workers observable characteristics. W also find positive and significant relation between unconditional dispersion of wages within plant and value added per hour worked, while we find a non-significant relation between conditional wage dispersion and value added per hours worked. Results indicate that the incentive effect of wage dispersion dominates fairness or sabotage considerations.
|Title of host publication||New Analyses of Worker Well-Being|
|Editors||Solomon W. Polachek, Konstantinos Tatsiramos|
|Number of pages||26|
|Place of Publication||Bingley|
|Publication status||Published - 2013|
|MoE publication type||A3 Book chapter|
|Name||Research in Labor Economics |