Disentangling Pay and Productivity in a Corporatist Economy: The Case of Germany

Authors

Scott M. Fuess Jr., University of Nebraska-LincolnFollow
Meghan Millea, Mississippi State UniversityFollow

Date of this Version

10-2002

Comments

IZA DP No. 597. Forschungsinstitut zur Zukunft der Arbeit Institute for the Study of Labor. Discussion Paper Series.

Abstract

Conventional theory predicts that productivity gains lead to pay hikes. Pay increases, however, can influence labor productivity. But what about in a corporatist economy? Focusing on Germany, we use an innovative technique developed by Geweke to disentangle the relationship between pay and productivity.