Trade-Off between Supervision and Wages-Rebitzer-JEBO1995

James B.Rebitzer , Sloan School of Management MIT, 1995

Abstract:
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      The logic of efficiency wage theory suggests a trade-off between wages and supervision. This paper reports evidence that high levels of supervision are indeed associated with lower wage levels. The empirical investigation centers on the effect
that safety supervision by host employers has on the wages of contract maintenance workers in the petrochemical industry. This narrow focus is important. Special instituional features of the contract employment relationship in petrochemicals make it possible to ameliorate econometric problems that may influenced earlier studies.