Judith
K. Hellerstein, David Neumark, and Kenneth R. Troske
Abstract
Competing models of wage determination hinge on the
relationships between wages, productivity, and worker characteristics.
Direct measures of worker productivity, however, are hard to obtain,
so economists usually rely on proxies. We combine U.S. data on individual
workers with data on the plants in which they are employed in order
to compare estimates of relative wages of workers of various characteristics
with estimates of their relative marginal productivities.
The results indicate that married workers are paid
more than never married workers, and the wage premium reflects a
corresponding productivity premium. Workers who have attended college
are more productive than workers who have not but, in most cases,
this productivity premium exceeds the wage premium; we provide evidence
that this result is consistent with skill-based technological change
in these plants. Prime-aged workers (35-54) are equally productive
as their younger counterparts, but in some specifications the relative
wage is signifcantly higher than the relative productivity. Results
for mature workers (55+) are more robust, with evidence nearly always
indicating a wage premium that exceeds the estimated productivity
differential. We find no evidence of wage discrimination against
blacks. We do find, however, that women generally are paid significantly
less than men —27% to 43% less; in almost every case, the
sex wage gap is significantly larger than the productivity gap,
consistent with sex discrimination. The only exception is for plants
in predominantly female industries, in which we estimate that women
are less productive than men and this differential is not significantly
different fom the wage differential.
Judith K. Hellerstein,Department of Economics, Northwestern
University David Neumark,Department of Economics, Michigan State University Kenneth R. Troske,Center for Economic Studies, U.S. Census Bureau
To Order:
Hard copies of IPR working papers cost $5.00 each (international orders are $10 each). We only accept checks drawn on U.S. bank and payable in U.S. funds. Checks or
money orders should be made payable to Northwestern University and sent to
the following address:
Publications Department - WP Orders
Institute for Policy Research
2040 Sheridan Rd., Evanston, IL 60208-4100.
For information, call 847-491-8712 or email ipr@northwestern.edu.
Please note that we do not accept credit cards.
