An Examination of the Wage Productivity Gap

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Abstract/Contents

Abstract: Economists have been puzzled by the recent trends in real wage and productivity growth. While productivity has risen steadily, the popular press has lamented that real wages have failed to keep pace. Some argue that the inclusion of benefits explains the disparity. Others suggest that labor has lost much of its bargaining power with the firm, as evidenced by a decline in unionization rates, and as such, a lower portion of firm profits are going to pay wages and salaries. Still others have suggested that the puzzle of real wage and productivity growth might not be much of a mystery at all – real wages have kept pace with productivity depending on how one measures these trends. This paper seeks to examine more closely the dynamics of real wage and productivity growth. Using data from various US government agencies, including the Bureau of Labor Statistics and the Bureau of Economic Analysis, it takes an empirical approach to determine the extent of the divergence between real wage and productivity growth and discusses factors influencing these relationships.

Type of resource	text
Date created	June 2007

Author	Sachdev, Nikhil
Primary advisor	Taylor, John
Degree granting institution	Stanford University, Department of Economics

Subject	Stanford Department of Economics
Subject	Wages
Subject	compensation
Subject	productivity
Subject	CPI
Subject	PCE
Subject	PPI
Genre	Thesis

Location	https://purl.stanford.edu/kp778wk8642

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Preferred Citation: Sachdev, Nikhil. (2007). An Examination of the Wage Productivity Gap. Stanford Digital Repository. Available at: https://purl.stanford.edu/kp778wk8642

Stanford University, Department of Economics, Honors Theses

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