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Understanding inter-industry wage structures in the euro area

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  • Veronique Genre
  • Karsten Kohn
  • Daphne Momferatou

Abstract

This article focuses on the euro area wage structure and its potential determinants from a sectoral viewpoint. Merging information from the Organization for Economic Co-operation and Development (OECD) Structural Analysis database with data from the EU Labour Force Survey, we construct a cross-country panel of 22 industries in eight euro area countries for 1991-2002. Data inspection confirms the existence of a fairly stable inter-industry wage structure that is similar across countries. We then apply panel data techniques to identify factors explaining inter-industry wage differentials in the euro area. Both workforce characteristics (e.g. human capital variables) and firm-related characteristics (e.g. capital intensity, productivity) contribute significantly. However, considerable wage heterogeneity across sectors remains. Idiosyncratic sector and country specifics, reflecting different socio-cultural and institutional backgrounds, appear to bear a major role. While our empirical analysis only uses direct evidence from workforce and firm-related characteristics, we also relate the remaining heterogeneity to institutional characteristics, based on related literature.

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Bibliographic Info

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

Volume (Year): 43 (2011)
Issue (Month): 11 ()
Pages: 1299-1313

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Handle: RePEc:taf:applec:v:43:y:2011:i:11:p:1299-1313

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Cited by:
  1. Antoni, Manfred & Janser, Markus & Lehmer, Florian, 2014. "The hidden winners of renewable energy promotion : insights into sector-specific wage differentials," IAB Discussion Paper 201412, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  2. Jakub Growiec, 2009. "Determinants of the Labor Share: Evidence from a Panel of Firms," National Bank of Poland Working Papers 69, National Bank of Poland, Economic Institute.
  3. Boeters, Stefan & Savard, Luc, 2013. "The Labor Market in Computable General Equilibrium Models," Handbook of Computable General Equilibrium Modeling, Elsevier.
  4. Sile Padraigin O'Dorchai, 2008. "Do women gain or lose from becoming mothers? A comparative wage analysis in 20 European countries," ULB Institutional Repository 2013/135835, ULB -- Universite Libre de Bruxelles.
  5. Kwon, Ohyun & Fleisher, Belton M. & Deng, Quheng, 2011. "Evolution of the Industrial Wage Structure in China Since 1980," IZA Discussion Papers 5880, Institute for the Study of Labor (IZA).

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