Wage Determination under Labor-Management : Theory and Evidence from Yugoslavia

In this paper we model and test alternative explanations of income determination in participatory and labor-managed firms. In the Yugoslav context, this involves distinguishing between the competing contentions that earnmings differentials are related to the system of self-management per se or are consequence of capital rationing by the authorities. our inital aim is theoretical ; to develop an adequate general formulation of the problem and an appropriate framework in which to embed the hypotheses. It ios also felt that rigorous empirical findings in this area will be an important input in evaluating the Yugoslav labor-managed system as well as the increasing degree of worker participation in other countries.