Journal Article

A physiological foundation for the nutrition-based efficiency wage model

Carl-Johan Dalgaard and Holger Strulik

in Oxford Economic Papers

Volume 63, issue 2, pages 232-253
Published in print April 2011 | ISSN: 0030-7653
Published online December 2010 | e-ISSN: 1464-3812 | DOI: https://dx.doi.org/10.1093/oep/gpq031
A physiological foundation for the nutrition-based efficiency wage model

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  • Demand and Supply of Labour
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Drawing on recent research on allometric scaling and energy consumption, the present paper develops a nutrition-based efficiency wage model from first principles. The biologically micro-founded model allows us to address empirical criticism of the original nutrition-based efficiency wage model. By extending the model with respect to heterogeneity in worker body size and a physiologically founded impact of body size on productivity, we demonstrate that the nutrition-based efficiency wage model is compatible with the empirical regularity that taller workers simultaneously earn higher wages and are less likely to be unemployed in less developed economies. The theory also provides an answer to the question of why the height-unemployment association may disappear in the process of development.

Keywords: O11; O15; J21; J31

Journal Article.  8591 words.  Illustrated.

Subjects: Demand and Supply of Labour ; Wages, Compensation, and Labour Costs ; Economic Development

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