This paper explains that some firms, especially in third world economies, will attempt to increase their profits by improving
their worker
productivity by paying a wage that is above the wage paid by other competing firms because, at the market level wage, workers may not get the necessary nutrients they require in order to carry out the working day's hard labor and to maintain a healthy lifestyle. The author points out that the ability of a firm to increase profits by setting these wages may not necessarily apply in other more
industrialized labor markets where there is not a strong correlation between worker productivity and their nutritional intake. The paper relates that the efficiency wage model indicates that the behavior of a firm seeking to increase its profits is no longer limited to just decisions on how many workers to hire.