Efficiency Wages cannot be ruled out on a priori theoretical grounds and evidence is needed. Direct evidence on the effects of wages on productivity and indirect evidence from the wage structure does not seem persuasive. In this paper we offer an indirect test of the efficiency wage theory, by...

In this paper we exploit a natural experiment provided by the 1999 introduction and 2001 increase of the UK National Minimum Wage (NMW) to investigate the relationship between wages and supervision and to test for efficiency wages considerations in a low-wage labour market, the UK residential...