Changes in structure and level of wages in a local labour market

Vijay Vyas, P. R. Pancholi

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For a long time inadequate understanding of causes and nature of persisting wage differentials has been a source of dissatisfaction to analysts. The neo-classical wage theory postulates that such differentials could not persist. The empirical research, however, uniformly shows that they do. Factors that influence inter-skill, inter-firm, interplant or inter-industry wage differentials are many. Given adequate competition in the concerned market the forces of supply and demand should shape a unique rate of wage in each occupation. The existence and power of trade unions, however, could significantly alter the level of this competitive wage rate. Recent research has documented enough evidence to demonstrate it. Size of the firm influencing the level of wage rates has also been reported. This is an attempt to present and analyse the changing pattern of wages and earnings in the organized industrial sector of Baroda city. The focus of this study are: (i) skill based wage differentials in small, medium and large units, (ii) inter plant wage differentials between plants of varying sizes, (iii) changes in real wages and, (iv) changes in employment vis-à-vis changes in wages at different levels of skills
Original languageEnglish
JournalQuarterly Journal of Research and Readings in Economics
Issue number3
Publication statusPublished - 1990


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