Wages & output across occupational groups in Singapore

Abstract

This paper has three parts. It first examines the trends of the real wage rates of selected occupations in the major sectors of Singapore. The second part studies the panel data on wage-output relationship across occupational groups in Singapore. Finally, we compare the cross elasticities of wages and productivity growth among the occupational groups. Findings are as follows. The real wage rates of managers and professionals are rather fluctuating and their trends are almost similar, whereas the real wage rates of the other occupational groups are almost constant, except for a few minor variations throughout the 10 year period. Unlike other groups, managers' (the group mainly representing entrepreneurial human capital) wages are negatively related to the output level, which indirectly suggests that manager's effective labour supply is backward-bending. In addition, the wages of managers increase with those of professionals and are significantly unit-elastic. We also further test an optimality condition in a theoretical growth model, concluding that, for all sectors considered, the productivity of entrepreneurial human capital uniformly grows faster than the counterpart of professional human capital.