The efficiency wage theory has been developed to explain differential wages and involuntary unemployment. In this paper considers differential wages in the public and private Large Manufacturing Establishment (LME) for period 1374-1377. To estimate wage equation we use education, expert, experience, and ownership as explanatory variables. The results show that: (a) there is a significant difference between wages in public and private sectors, (b) differences in wage are due to not only differences in education, expert, experience, firms size and ownership, but also when we eliminate the effects of above variables, the differences in wages have remained significant yet.
JEL Classification: J31