Efficiency wage model: an OECD sample

The Classical economists were assuming, when they were expressed the labour demand curve, the labour as a homogeneous factor and a change which is occur in the real wages of labour couldn?t effect the labour productivity and couldn?t shift the labour demand curve. At the middle of the 20th century, The New Keynesian Economists brought some criticism against that thought of the Classical economists. Accordingly to the New Keynesian economists real labour wages can effect the labour productivity as positively. Although New Keynesian economists also brought some explanation for the involuntary unemployment and developed an approach about the real wage rigidities, which has called Efficiency Wage Theory. In this study, following the Efficiency Wage Theory that explained why firms paying a wage which is above the market clearing level to their workers, annually wage growth rate (ORUBO) and annually labour productivity growth rate (EVBO) data are supplied from the 34 countries that related to the Organisation for Economic Co-operation and Development (OECD) between the years of 2000 and 2010. After that the long-run relation between (ORUBO) and (EVBO) has tested with Pedroni Cointegration Analysis. According to the findings of the study, for OECD countries, a cointegration has arised between the labour productivity and the real wages. Key Words: Efficiency Wages, Productivity, Wage Rigidity, New Keynesian, Shirking Model.