The earnings of piece-rate workers usually exceed those of hourly paid workers performing the same tasks. Theory suggests three reasons why. What are they

Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter26: Earnings, Productivity, And The Job Market
Section: Chapter Questions
Problem 12CQ
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The earnings of piece-rate workers usually exceed those of hourly paid workers performing the same tasks. Theory suggests three reasons why. What are they? b) Suppose that as employment shifts out of manufacturing to the service sector, a higher proportion of workers are employed in small firms. What effect would this growth of employment in small firms have on the types of compensation schemes used to stimulate productivity?

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