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Essays on wage determination: some empirical and theoretical aspects -PhD Thesis-


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This thesis is a collection of three essays treating both empirical and theoretical aspects of the process of wage determination. In the first essay, I apply GMM techniques to the estimation of testing of a wage equation using data from the British Household Panel Survey. I cannot reject the strict exogeneity of size, union and industry with respect to the time varying idiosyncratic shock. I find compelling evidence of correlation between the unobserved time invariant individual effect, i, and size and industry. However, there is no evidence of correlation between i and union. In the second essay, I analyze a model in the spirit of Shapiro and Stiglitz (1984) where firms want to motivate workers to provide effort. Workers may differ in their productive ability and firms with different monitoring technologies may demand different levels of effort. I prove that the comparison of estimates of wage differentials that control and do not control for unobservable ability will not distinguish between competing hypotheses. Finally, in the third essay, I compare the wage of a worker performing an activity for an outside contractor with the wage that the firm contracting for this service would have paid were this worker on its payroll. If norms of internal equity were a binding constraint, the wage paid by the outside contractor should not be expected to be identical to the in-house wage. My results, obtained using data from the U.S. Current Population Survey and the Input-Output matrix, are consistent with the view that norms of internal equity are binding.


not held in Res Lib - bibliographic reference only


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