Abstract

GOMEZ RODRIGUEZ, Tomás; RIOS BOLIVAR, Humberto  and  AALI BUJARI, Ali. Efficient wages and Economic Growth in Latin America. Ens. Rev. econ. [online]. 2018, vol.37, n.2, pp.213-235. ISSN 2448-8402.  https://doi.org/10.29105/ensayos37.2-4.

At present, efficiency wage research has drawn attention to the possibility that wage increases can boost productivity and thus the economic growth of a country. On the other hand, the possibility is suggested that the negative effects of wage increase, specifically unemployment and inflation, will have a positive effect on inefficiency. In order to study these possible results, a stochastic production frontier approach is used for panel data in a period ranging from 1995 to 2011. The countries considered in the study are: Argentina, Brazil, Colombia, Chile, Mexico, Peru and Venezuela. There is evidence that there is a positive relationship between wage increase and economic growth. The results also show that unemployment and inflation have a positive effect on inefficiency.

Keywords : Economic Growth; Efficient Wages; Technical Efficiency.

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