Efficiency Wages, Deferred Payments, and Direct Incentives in Agriculture
Posted: 12 Jan 2003
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.
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