Real Wages as Determinant of Labour Productivity in the Mexican Tourism Sector

By Brida, Juan Gabriel; Risso, Wiston Adrián et al. | European Journal of Tourism Research, January 1, 2010 | Go to article overview

Real Wages as Determinant of Labour Productivity in the Mexican Tourism Sector


Brida, Juan Gabriel, Risso, Wiston Adrián, Carrera, Edgar J. Sanchez, European Journal of Tourism Research


(ProQuest: ... denotes formulae omitted.)

Introduction

The best known and most meaningful expression of economic productivity is the productivity of labour, which can be expressed as the value added per employee. Moreover, output per worker is often used as the main measure of productivity because it is straightforward to quantify, since the data - total output and employment - are readily available and can be linked to the objective of raising total output growth.

Recruiting highly-skilled workers is quite a guarantee for any successful tourist firm. Labour productivity in tourism sector is a source of growth and this includes education, qualifications and training of people employed in this sector. Inadequate tourist education and lack of qualifications in an ethnic perspective, have dreadful consequences in tourist productivity (Trasury, 2003 and Eaglen et al., 2000). Moreover, investment in information technology and communication contributes enormously in productivity tourism and then, high-skilled workers in the tourist sector enable tourist efficiency (see Jacob et al., 2003). Productivity in tourism sector has been investigated recently by a number of researchers (Blake et al., 2006; Such and Zamora, 2006; Peypoch and Solonandrasana, 2006 and 2008; Brida et al., 2008).

In this vein, Blake et al. (2006) identified three classical measures of productivity in tourism: i) output per worker, ii) output per hour of labour and, iii) the total factor productivity. As Blake et al. pointed out, increases in wages and profits can be achieved by increases in competitiveness, driven by rising productivity. In tourism, productivity refers to the efficiency and optimal allocation of the used resources, by relating the quantity of labour and capital, to outputs.1

There are large differences among the tourism destinations where the developing countries have the highest productivity of labour. Depending on the level of development, labour productivity in tourism will be either less than or greater than the productivity of the economy as a whole. In the most developed tourism countries the value added per employee in tourism is somewhat lower than the general level of productivity.

This paper aims to study the relationship between the real wages and the labour productivity in the tourism sector. The following papers, suggest the existence of a positive relationship between real wages and productivity:

* Marquetti (2004) is an empirical study of the relationship between real wage and productivity for the US economy, but they explain that technical change as being biased toward labour-saving.

* Gordon (1987) studies the dynamic behaviour of changes in productivity, wages and prices for the U.S., Japan, Europe, showing that the shift from high to low real wage growth is responsible for a substantial proportion of the decline in productivity growth in industrial sector for the three studied economies.

* Hibbs and Locking (2000) study the wage dispersion and the productivity in Sweden, showing that a reduction of the real wages differential contribute positively to an aggregate output and productivity growth.

In the present paper, at first, we set a theoretical model to explain the relation between real wages and labour productivity in the Mexican tourism sector. Typically the main parts of tourism expenditures are related with hotels and restaurants which are very labour intensive personal services. For this reason, we focus on a production function of tourism depending only on labour. As second step we find a long-run relationship between these two variables in the Mexican tourism sector during the period 1970-2004. The third step is to investigate causal linkage between real wages and labour productivity. This is the central aspect of the study and the main hypothesis is that an increase in real wages reduces the labour demand due to rigidities in the labour markets. 2

In order to study the causal relationship we apply the Granger-causality test. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Real Wages as Determinant of Labour Productivity in the Mexican Tourism Sector
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.