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Inter-industry wage premiums and industry-specific productivity in Taiwan

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  • Pi-Fem Hsu
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    Abstract

    By using Taiwan's Manpower Utilization Survey data for the 1978-2000 period, different inter-industry wage premiums in Taiwan are observed and the impact of workers' industry-specific productivity on the wage explored. The empirical results show that industry-specific skills result in industry stayers having higher wages than industry switchers through their reservation wages. It is also found that the pre-displacement industry affiliations that are associated with the post-displacement wages are explained by the workers' unobserved abilities. Furthermore, by comparing the different residual means between industry switchers and stayers based on each industry's wage equation, it is found that the switchers are low-wage workers who tend to be located in the high-wage industries. The high-wage industry leavers are also found to have higher post-displacement wage residuals than the low-wage industry leavers. These results suggest that the differences in industry wage premiums may be explained by the industry-specific productivity.

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    File URL: http://www.tandfonline.com/doi/abs/10.1080/00036840500118861
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    Bibliographic Info

    Article provided by Taylor & Francis Journals in its journal Applied Economics.

    Volume (Year): 37 (2005)
    Issue (Month): 13 ()
    Pages: 1523-1533

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    Handle: RePEc:taf:applec:v:37:y:2005:i:13:p:1523-1533

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    1. Blanchflower, D. & Oswald, A. & Garrett, M., 1988. "Insider Power In Wage Determination," Papers 319, London School of Economics - Centre for Labour Economics.
    2. Lawrence F. Katz, 1986. "Efficiency Wage Theories: A Partial Evaluation," NBER Chapters, in: NBER Macroeconomics Annual 1986, Volume 1, pages 235-290 National Bureau of Economic Research, Inc.
    3. Topel, Robert, 1990. "Specific capital and unemployment: Measuring the costs and consequences of job loss," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 33(1), pages 181-214, January.
    4. Gibbons, Robert & Katz, Lawrence F, 1992. "Does Unmeasured Ability Explain Inter-industry Wage Differentials?," Review of Economic Studies, Wiley Blackwell, vol. 59(3), pages 515-35, July.
    5. Erkan Erdil & I. Hakan Yetkiner, 2001. "A comparative analysis of inter-industry wage differentials: industrialized versus developing countries," Applied Economics, Taylor & Francis Journals, vol. 33(13), pages 1639-1648.
    6. Michael P. Keane, 1991. "Individual heterogeneity and interindustry wage differentials," Discussion Paper / Institute for Empirical Macroeconomics 54, Federal Reserve Bank of Minneapolis.
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    Cited by:
    1. Saten Kumar & Don J. Webber & Geoff Perry, 2012. "Real wages, inflation and labour productivity in Australia," Applied Economics, Taylor & Francis Journals, vol. 44(23), pages 2945-2954, August.

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