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Culture and the Labour Market

Siobhan Austen

Culture and the Labour Market attempts to define the meaning of culture and the nature of its possible consequences on economic processes and outcomes. In particular, the book examines alternative theoretical and empirical approaches to the economic analysis of cultural effects in the labour market. Using extensive new data from fourteen countries, the author finds tangible evidence of substantial cross-cultural differences in beliefs about wage inequality.
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Chapter 5: Community Attitudes to Skill-based Wage Differentials

Siobhan Austen


5.1 INTRODUCTION The theoretical analysis in the previous chapter defined a number of important propositions about individuals’ judgments of the fairness of their wage payments. These included a proposition that fairness judgments are often based on the existing structure of wage relativities. Associated with this, a proposition was advanced that market-based factors associated with changing economic conditions play a relatively minor role in individuals’ assessments of the fairness of their wages. The economic implications of these norms were also highlighted in the chapter. In this chapter the data from the 1992 International Social Science Survey Program (ISSSP) are utilized to provide information on the formation of attitudes to wage differentials. Community attitudes to skill differentials in 14 countries are surveyed. These are: Australia, West and East Germany (as they then were), Great Britain, the United States, Hungary, Poland, Italy, Norway, Czechoslovakia (as it then was), Bulgaria, Russia, Canada and New Zealand. A further analysis of the changes in the attitudes to these wage differentials that occurred in six countries (Australia, West Germany, Great Britain, the United States, Hungary and Poland) over the 1987–1992 period is also presented. Given the theoretical discussion in the previous chapter, a particular focus of this empirical analysis of community attitudes to skill-based wage differentials is the degree to which individual differences in beliefs about the legitimate size of this wage differential are affected by the existing wage relationships within each country, as opposed to other economic factors relating to the respondent’s self-interest and/...

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