Professor Meade has argued that the discriminating labor-capital pa rtnerships (DLCPs) might not only help cure stagflation, but are to be preferred to Weitzman-type profit-sharing schemes. This paper argu es that: (1) Once we endogenize wages, DLCPs might not affect unemplo yment; (2) the...

This paper presents evidence that firm-level productivity increases when either relative wages rise, or the level of unemployment rises. Both facts are consistent with the efficiency wage model. The link between relative wages and productivity may also be explicable by unobserved human capital,...