Who says a higher wage improves the labor supply?

Abstract

A message coming from the popular culture in recent years has been that a rise in wages in an occupation brings forth not only more workers but better workers as well. In this paper I present reasons for doubting this claim and for suspecting that the very opposite may be true. The higher an agent's minimal acceptable wage in occupation A, the more likely it is that other job opportunities exist. To the extent that this signals other talents which in turn raise the likelihood of competence in occupation A, the “better” such a worker might be assumed to be. I argue that largely overlooked is the possibility that an agent may be unwilling to work at the lower wage because of a low level of personal satisfaction or because of an insufficient belief in the work’s importance. I conclude that it is the person who is willing to work at the low wage who is more apt to achieve satisfaction and believe in the signficance of the work, and that, absent empirical evidence, it is therefore not correct to say that higher wages bring forth better workers.