Paper Info
Title
Vertical wage differences in hierarchically structured firms
Abstract
In this paper, we present a cooperative model of a hierarchically structured firm to study wage differences between different levels in such a firm. We consider a class of wage functions that are based on marginal contributions to production. It turns out that the wage of a manager is always at least as high as the wage of its subordinates. On the other hand, the wage of a manager never exceeds the sum of the wages of its direct subordinates. These bounds are sharp in the sense that we can characterize for which production processes they are reached. For the class of constant elasticity of substitution (CES) production functions this implies that the wage differences are maximal for linear production functions, and they are minimal for Cobb-Douglas production functions.
Year
DOI
Venue
2008
10.1007/s00355-007-0230-7
SOCIAL CHOICE AND WELFARE
Keywords
Field
DocType
quantitative method,production function,production process
Economics,Mathematical economics,Microeconomics,Efficiency wage,Labour economics,Constant elasticity of substitution,Wage
Journal
Volume
Issue
ISSN
30.0
2
0176-1714
Citations 
PageRank 
References 
0
0.34
3
Authors
3
Name
Order
Citations
PageRank
René Van Den Brink118727.06
vu2856122.39
faculteit der economische wetenschappen en bedrijfskunde39712.85