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Its use can be traced back to the late 19th century and Francis Amasa Walker's 'residual claimant theory', [3] which argues that in the distribution of wealth among profits, rent, interest and wages, the laborer is the residual claimant and wages the variable residual share of wealth, thereby going against the established view of profits as the ...
The wage–fund doctrine is a concept from early economic theory that seeks to show that the amount of money a worker earns in wages, paid to them from a fixed amount of funds available to employers each year , is determined by the relationship of wages and capital to any changes in population.
The Theory of Wages is a book by the British economist John Hicks, published in 1932 (2nd ed., 1963). It has been described as a classic microeconomic statement of wage determination in competitive markets. It anticipates a number of developments in distribution and growth theory and remains a standard work in labour economics. [1]
The theory of compensating wage differentials, by Adam Smith, provides a theoretical framework of the ideology behind pay differences. The theory explains that jobs with undesirable characteristics will compensate with higher wages compared to the popular, more desirable jobs, who provide lower wages to its workers. [13]
Wage differences exist, particularly in mixed and fully/partly flexible labour markets. For example, the wages of a doctor and a port cleaner, both employed by the NHS, differ greatly. There are various factors concerning this phenomenon. This includes the MRP of the worker. A doctor's MRP is far greater than that of the port cleaner.
The labour supply curve shows how changes in real wage rates might affect the number of hours worked by employees.. In economics, a backward-bending supply curve of labour, or backward-bending labour supply curve, is a graphical device showing a situation in which as real (inflation-corrected) wages increase beyond a certain level, people will substitute time previously devoted for paid work ...
The Gift Exchange Theory, also referred to as the fair-wage theory, applies when employees are provided with better wages than they could receive at another firm in exchange for a higher work standard. [32] In 1993, a laboratory experiment [33] was conducted to test the effects that the Gift Exchange Theory had on employee effectiveness ...
Keynes's simplified starting point is this: assuming that an increase in the money supply leads to a proportional increase in income in money terms (which is the quantity theory of money), it follows that for as long as there is unemployment wages will remain constant, the economy will move to the right along the marginal cost curve (which is ...