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O‐ring Wage Inequality

Bibliographic Data

ID9725115
AuthorsALBERTO DALMAZZO (0000-0002-9968-4419, University of Siena), Tuomas Pekkarinen (0000-0003-0976-2602, Uppsala University), Pasquale Scaramozzino (0000-0003-4917-6560, University of Rome Tor Vergata)
Year2007
Volume74
Issue295
Pages515-536
Publication date2007-08-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueEconomica (JOURNAL)
Journal identifiersISSN: 0013-0427 • E-ISSN: 1468-0335
PublisherWiley (PUBLISHER • GB)
DOI10.1111/j.1468-0335.2006.00553.x
OpenAlexW2118295974
LanguageEN
References cited32

We examine the relationship between technological complexity and wage inequality, using an efficiency wage model that adopts Kremer's O‐ring production function. The model has two main implications: (i) when the production process becomes more complex, within‐task wage differences increase between plants, and (ii) between‐task wage differences increase within plants. We study these implications empirically using industry data providing quantified information on the complexity of the tasks. We find that wages increase in all the tasks with the complexity of the production process. Furthermore, the relationship between the complexity of the tasks and wages is steepest in the firms with more complex production processes

Biology · Economics · Efficiency wage · Function (biology) · Inequality · Labour economics · Management · Microeconomics · Process (computing) · Production (economics) · Task (project management) · Wage · Wage Inequality · Computer Science · Firm Innovation and Growth · Global trade and economics · Labor market dynamics and wage inequality · Mathematics

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