The Factors Influencing Labor's Productivity and Wages in Jordan's Manufacturing Sector
Year: 2013
Type: article
Abstract: The analysis and identification of factors that influence the labor’s productivity and wages in Jordan’s manufacturing sector during the period 1985 – 2009 are introduced. In order to ensure the credibility of the results, the study uses the statistical tests that included in both descriptive and standard approaches to evaluate both the productivity and wages models. These statistical tests are: the stability test of time series data, co-integration test, and error correction model that used for demonstrate the causal relationship between the productivity and its affecting factors. The results of the first model demonstrate a positive relationship between the labor’s productivity and both the labor’s fraction from investment in the manufacturing sector and the labor’s fraction from compensation of employees in the same sector. In addition, the relationship between the labor’s productivity and credit facilities balances granted for manufacturing industries was a negative relation. Moreover, the results of the second model which explains the factors that influence the wages demonstrate a positive relationship between labor’s compensation and both labor’s productivity and inflation. However, for the labor factor the results indicate the existence of a negative relationship with compensation of employees; which means that the increase in the number of employees will lead to a decrease in the labor’s compensation if we assume that the compensation is constant.
Authors: Mohammad W. Alomari, Waleed Hmedat
Institutions: Hashemite University, Yarmouk University
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W2139786749