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Wages, Profits and Individual Unemployment Risk : Evidence from Matched Worker-Firm Data

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Author Info

  • Arai, Mahmood

    (FIEF and Department of Economics, Stockholm University)

  • Heyman, Fredrik

    (Trade Union Institute for Economic Research)

Abstract

We present new evidence on the extent of rent sharing based on a large panel of matched worker-firm data for Sweden. Controlling for worker and firm heterogeneity, as well as examining the problem of endogeneity of profits, we report evidence implying the existence of rent sharing. Another result is that unemployment risk, aggregated at the firm and various industry levels, has a negative effect on individual workers' wages after controlling for individual differences in unemployment risk.

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File URL: http://swopec.hhs.se/fiefwp/papers/WP172.pdf
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Bibliographic Info

Paper provided by Trade Union Institute for Economic Research in its series Working Paper Series with number 172.

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Length: 27 pages
Date of creation: 13 Dec 2001
Date of revision:
Handle: RePEc:hhs:fiefwp:0172

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Keywords: Wages; Profits; Rent-Sharing; Wage-curve;

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References

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  1. David G. Blanchflower & Andrew J. Oswald & Mario D. Garrett, 1989. "Insider Power in Wage Determination," NBER Working Papers 3179, National Bureau of Economic Research, Inc.
  2. John M. Abowd & Francis Kramarz & David N. Margolis, 1994. "High Wage Workers and High Wage Firms," NBER Working Papers 4917, National Bureau of Economic Research, Inc.
  3. Margolis, D.N. & Salvanes, K.G., 2001. "Do Firms Really Share Rents with Their Workers?," Papers 11/2001, Norwegian School of Economics and Business Administration-.
  4. William T. Dickens & Lawrence F. Katz, 1986. "Interindustry Wage Differences and Industry Characteristics," NBER Working Papers 2014, National Bureau of Economic Research, Inc.
  5. Andrew K.G. Hildreth and Andrew J. Oswald, . "Rent-Sharing and Wages: Evidence from Company and Establishment Panels," Economics Discussion Papers 425, University of Essex, Department of Economics.
  6. Nickell, S & Vainiomaki, J & Wadhwani, S, 1994. "Wages and Product Market Power," Economica, London School of Economics and Political Science, vol. 61(244), pages 457-73, November.
  7. Mahmood Arai, 2003. "Wages, Profits, and Capital Intensity: Evidence from Matched Worker-Firm Data," Journal of Labor Economics, University of Chicago Press, vol. 21(3), pages 593-618, July.
  8. Blanchflower, David G & Oswald, Andrew J & Sanfey, Peter, 1996. "Wages, Profits, and Rent-Sharing," The Quarterly Journal of Economics, MIT Press, vol. 111(1), pages 227-51, February.
  9. L Christofides & A Oswald, 1991. "Real Wage Determination and Rent-Sharing in Collective Bargaining Agreements," CEP Discussion Papers dp0042, Centre for Economic Performance, LSE.
  10. Oswald, Andrew J, 1982. "The Microeconomic Theory of the Trade Union," Economic Journal, Royal Economic Society, vol. 92(367), pages 576-95, September.
  11. Stephen Nickell & D. Nicolitsas, 1994. "Wages," LSE Research Online Documents on Economics 51644, London School of Economics and Political Science, LSE Library.
  12. Krueger, Alan B & Summers, Lawrence H, 1988. "Efficiency Wages and the Inter-industry Wage Structure," Econometrica, Econometric Society, vol. 56(2), pages 259-93, March.
  13. Abowd, John M & Lemieux, Thomas, 1993. "The Effects of Product Market Competition on Collective Bargaining Agreements: The Case of Foreign Competition in Canada," The Quarterly Journal of Economics, MIT Press, vol. 108(4), pages 983-1014, November.
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Citations

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Cited by:
  1. Pedro S. Martins & Luiz A. Esteves, 2008. "Is There Rent Sharing in Developing Countries? Matched-Panel Evidence from Brazil," Working Papers 14, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
  2. Nekby, Lena, 2003. "Gender differences in rent sharing and its implications for the gender wage gap, evidence from Sweden," Economics Letters, Elsevier, vol. 81(3), pages 403-410, December.
  3. Lundborg, Per, 2005. "Wage Theories for the Swedish Labour Market," Working Paper Series 207, Trade Union Institute for Economic Research.
  4. Nekby, Lena, 2002. "Gender Differences in Rent Sharing and its Implications for the Gender Wage Gap," Working Paper Series 182, Trade Union Institute for Economic Research.
  5. Alessia Matano & Paolo Naticchioni, 2011. "Is there Rent Sharing in Italy? Evidence from Employer-Employee data," Working Papers - Dipartimento di Economia 11-DEISFOL, Dipartimento di Economia, Sapienza University of Rome, revised 2011.
  6. Roberto Pinheiro & Ludo Visschers, 2013. "Unemployment Risk and Wage Differentials," CESifo Working Paper Series 4534, CESifo Group Munich.
  7. Lundborg, Per, 2005. "Wage Fairness, Growth and the Utilization of R&D Workers," Working Paper Series 206, Trade Union Institute for Economic Research.
  8. Pedro S. Martins, 2004. "Rent Sharing Before and After the Wage Bill," Discussion Paper Series, Department of Economics 200405, Department of Economics, University of St. Andrews.
  9. Navon, Guy & Tojerow, Ilan, 2006. "The Effects of Rent-Sharing on the Gender Wage Gap in the Israeli Manufacturing Sector," IZA Discussion Papers 2361, Institute for the Study of Labor (IZA).
  10. Pedro S. Martins & Luiz A. Esteves, 2012. "Wages and Profits in Manufacturing Firms: Matched-Panel Evidence from Brazil," Economia, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics], vol. 13(3b), pages 815_841.
  11. Lundin, Nan Nan & Yun, Lihong, 2004. "International Trade and Inter-Industry Wage Structure in Swedish Manufacturing - Evidence from matched employer-employee data," Working Paper Series 196, Trade Union Institute for Economic Research.
  12. Selén, Jan & Ståhlberg, Ann-Charlotte, 2004. "Wage and Compensation Inequality — How Different?," Working Paper Series 197, Trade Union Institute for Economic Research.
  13. François Rycx & Ilan Tojerow & Robert Plasman, 2004. "Rent sharing and the gender wage gap in Belgium," ULB Institutional Repository 2013/785, ULB -- Universite Libre de Bruxelles.

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