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Rent-Sharing and the Cyclicality of Wage Differentials

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Author Info
Philip De Caju () (National Bank of Belgium)
François Rycx () (DULBEA, Université libre de Bruxelles, Brussels)
Ilan Tojerow () (DULBEA, Université libre de Bruxelles, Brussels)

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Abstract

This paper investigates inter-industry wage differentials (IWD) in Belgium, taking advantage of a unique matched employer-employee dataset covering the years 1999-2005. Findings show the existence of large wage differentials among workers with the same observed characteristics and working conditions, employed in different sectors. These differentials are persistent and no particular trend is observed. However, their dispersion appears to show a cyclical pattern over time. Further results indicate that the instrumented elasticity between wages and profits is found to be quite stable over time and varies between 0.034 and 0.043. This rent-sharing phenomenon accounts for a large fraction of IWDs.

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Publisher Info
Paper provided by Université libre de Bruxelles, Department of Applied Economics (DULBEA) in its series Working Papers DULBEA with number 08-23.RS.

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Length: 76 pages
Date of creation: Nov 2008
Date of revision:
Handle: RePEc:dul:wpaper:08-23rs

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Related research
Keywords: Industry wage differentials; Rent-sharing; Matched employer-employee data.;

Other versions of this item:

Find related papers by JEL classification:
D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts

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