Managerial Compensation, Unfair Wages and Productivity: J.K. Galbraith Revisited

Dr George Messinis
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Interdisciplinary research shows that income comparisons are pervasive at the workplace. I examine the idea that management compensation impacts significantly on work morale and effort. The effect operates by the influence executive pay has on worker perceptions of unfair wages. I utilise Australian Longitudinal data (1994-1998) at the firm level that incorporates information on worker education and skills as well as managerial compensation and other wages. Also, I exploit 'Ilo Laborsta' panel data ( 1985-2004) to consider the hypothesis in the global context. The evidence is consistent with the view that a wage premium exists that depends on changes in the 'unfair wage'. We account for human capital effects and reverse causality.

Keywords: Unfair Wages, Income Distribution, Human Capital, Longitudinal Data, Labour Productivity
Stream: Psychology, Cognitive Science and the Behavioural Sciences, Economics and Management
Presentation Type: Virtual Presentation in English
Paper: A paper has not yet been submitted.

Dr George Messinis

Research Fellow, Centre for Strategic Economic Studies, Victoria University
Melbourne, Victoria, Australia

PhD in Economics (University of Melboure, 1999). Research Interests: Innovation; Knowledge Economy; Medical Innovation; Behavioural Economics; Human Capital and Behaviour at Work. Publications: Consumption/Saving Habit Modification; Innovation. Research Fellow at CSES since 2001. Research Collaboration. Interdisciplinary research: Economics; Sociology; Psychology.

Ref: I06P0180