GOVERNMENT INTERVENTION, EFFICIENCY WAGES, AND THE EMPLOYER SIZE WAGEEFFECT IN ZIMBABWE

This paper uses matched employer-employee data from a survey of 201 ma nufacturing firms and 1609 of their workers conducted in Zimbabwe in t he summer of 1933, The results indicate that there is a substantial pr emium associated with employment in larger firms, and that this premiu m cannot be explained by differences in worker quality and job charact eristics, nor is it eliminated by controlling for unionization, minimu m wages or other forms of government intervention, The size premium is much larger for white collar than for blue collar workers. These diff erentials are also found to be substantially larger than those estimat ed for other developed and developing countries. The analysis uses the data about firm characteristics to explore a number of efficiency wag e-based explanations of the size differential, and finds results which are consistent with, but not conclusive proof of, hiring, turnover, a nd morale based notions of efficiency wages. (C) 1997 Elsevier Science B.V.