Determining factors of relative wages: an empirical study with primary data for the metropolitan region of Recife

Abstract

This paper forwards some hypotheses on wage determination and relies on a survey with 210 questionnaires applied to workers in Recife to test them empirically. The major conclusions are: (i) Human capital is an important factor determining real wages and the domestic environment is crucial for its accumulation; (ii) workers bargaining strength, as measured by the union model, as well as size and ownership of the company, are also relevant factors determining the real wages; (iii) unions affiliation to Central Única dos Trabalhadores raises wages; (iv) age is a relevant variable to determine wages, but only in the set which includes state owned enterprises; (v) the number of dependents is also relevant to determine relative wages; and (vi) wages for women are lower than for men.

JEL Classification: J3; J24.