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Efficiency Wages, Deferred Payments, and Direct Incentives in Agriculture
Author(s) -
Moretti Enrico,
Perloff Jeffrey M.
Publication year - 2002
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1111/1467-8276.00060
Subject(s) - wage , payment , efficiency wage , incentive , economics , labour economics , compensation (psychology) , agriculture , empirical evidence , direct payments , microeconomics , finance , psychology , ecology , philosophy , epistemology , psychoanalysis , biology
Abstract Empirical evidence from agricultural labor markets is consistent with efficiency‐wage theory and inconsistent with several alternative explanations. According to this theory, the higher wage or deferred payment (benefits) that direct‐hire growers pay relative to that of farm labor contractors is an efficiency wage. Growers use this extra compensation to lower their monitoring expenses and reduce shirking by workers.