Gottschalk, Peter T.
April 1978
ILR Review;Apr78, Vol. 31 Issue 3, p368
Academic Journal
Although the marginal productivity theory is central to much of neoclassical labor economics, it has received little empirical support from previous studies, perhaps because of the difficulty of disaggregating the labor variable. This paper estimates the marginal productivity of eight different occupations by estimating production models with cross-section data and comparing the estimated marginal products with factor payments. Two levels of conclusions are reached. First, one can conclude with confidence that this study does not yield evidence supportive of the marginal productivity theory. A second, more tentative, conclusion is that there is a systematic difference between factor payments and productivities: blue-collar occupations are paid less than they produce while capital and white-collar occupations are paid more than they produce.


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