HKS Affiliated Authors
Frank and Denie Weil Director of the Mossavar-Rahmani Center for Business and Government
Charles W. Eliot University Professor
Excerpt
Excerpt
Productivity and Pay: Is the Link Broken? Lawrence Summers, June 2018, Paper, "Since 1973 median compensation in the United States has diverged starkly from average labor productivity. Since 2000, average compensation has also begun to diverge from labor productivity. These divergences lead to the question: Holding all else equal, to what extent does productivity growth translate into compensation growth for typical American workers? We investigate this, regressing median, average, and production/nonsupervisory compensation growth on productivity growth in various specifications. We find substantial evidence of linkage between productivity and compensation..." Link