Wages, Profits and Capital Intensity: Evidence from Matched Worker-Firm Data
AbstractIn this paper I use data on workers matched whit firms balance-sheet reports to examine the relation between wages and firms´ ability to pay. Results indicate that experienced and highly educated workers are sorted into profitable firms. Wages are significantly correlated to profits and capital-labor ratio, after controlling for workers quality (observed characteristics as well as time-invariant individual effects), job characteristics, local unemployment, firms´ employment history and employer size. These are mainly within industry effects attributed to wage determination at the firm-level. The conclusion is that previous studies based on industry data substantially underestimate the impacts of profits on wages.
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Bibliographic InfoPaper provided by Stockholm University, Department of Economics in its series Research Papers in Economics with number 1999:3.
Length: 27 pages
Date of creation: 30 Apr 1999
Date of revision:
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Postal: Department of Economics, Stockholm, S-106 91 Stockholm, Sweden
Phone: +46 8 16 20 00
Fax: +46 8 16 14 25
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More information through EDIRC
wages; profits; capital intensity; rent-sharing;
Other versions of this item:
- 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.
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
This paper has been announced in the following NEP Reports:
- NEP-ALL-1999-05-03 (All new papers)
- NEP-LAB-1999-05-03 (Labour Economics)
- NEP-LTV-1999-09-05 (Unemployment, Inequality & Poverty)
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