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Is There Rent Sharing In Developing Countries? Matched-Panel Evidence from Brazil Author info | Abstract | Publisher info | Download info | Related research | Statistics Pedro S. Martins () (Queen Mary, University of London, CEG-IST Lisbon and IZA Bonn)
Luiz A. Esteves () (Universidade Federal do Paraná and Università di Siena)
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We provide evidence about the determinants of the wage structures of developing countries by examining the case of Brazil. Our specific question is whether Brazil’s dramatic income and wage differentials can be explained by the division of rents between firms and their employees, unlike in competitive labour markets. Using detailed individual-level matched panel data, covering a large share of manufacturing firms and more than 30 million workers between 1997 and 2002, we consider the endogeneity of profits, by adopting different measures of profits and different instruments and by controlling for spell fixed effects. Our results, robust to different specifications and tests, indicate no evidence of rent sharing. This conclusion contrasts with findings for most developed countries, even those with flexible labour markets. Possible explanations for the lack of rent sharing include the weakness of labour-market institutions, the high levels of worker turnover and the macroeconomic instability faced by the country.
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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number
2317.
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Length: 35 pages
Date of creation: Sep 2006Date of revision:
Handle: RePEc:iza:izadps:dp2317Contact details of provider: Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany Phone: +49 228 3894 223 Fax: +49 228 3894 180 Web page: http://www.iza.org
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Keywords: wage bargaining ; instrumental variables ; matched employer-employee data ; developing countries ; Other versions of this item:
Paper 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.
[Downloadable!] Pedro S. Martins & Luiz Alberto Esteves, 2006.
"Is There Rent Sharing In Developing Countries? Matched-Panel Evidence From Brazil ,"
Anais do XXXIV Encontro Nacional de Economia [Proceedings of the 34th Brazilian Economics Meeting]
158, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
[Downloadable!] Pedro Martins & Luiz Alberto Esteves, 2007.
"Is There Rent Sharing In Developing Countries? Matched-Panel Evidence from Brazil ,"
Working Papers
0060, Universidade Federal do Paraná, Department of Economics.
[Downloadable!] Find related papers by JEL classification: J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
This paper has been announced in the following NEP Reports :
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Discussion Paper Series, Department of Economics
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Applied Economics ,
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"Filiação Industrial e Diferencial de Salários no Brasil ,"
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"Enforcement of Regulation, Informal Labor and Firm Performance ,"
IZA Discussion Papers
1759, Institute for the Study of Labor (IZA).
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Other versions: Pedro S. Martins & Luiz A. Esteves, 2006.
"Is There Rent Sharing In Developing Countries? Matched-Panel Evidence from Brazil ,"
IZA Discussion Papers
2317, Institute for the Study of Labor (IZA).
[Downloadable!]
Other versions:
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.
[Downloadable!] Pedro S. Martins & Luiz Alberto Esteves, 2006.
"Is There Rent Sharing In Developing Countries? Matched-Panel Evidence From Brazil ,"
Anais do XXXIV Encontro Nacional de Economia [Proceedings of the 34th Brazilian Economics Meeting]
158, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
[Downloadable!] Pedro Martins & Luiz Alberto Esteves, 2007.
"Is There Rent Sharing In Developing Countries? Matched-Panel Evidence from Brazil ,"
Working Papers
0060, Universidade Federal do Paraná, Department of Economics.
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Economics Working Papers (Ensaios Economicos da EPGE)
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Textos para discussão
503, Department of Economics PUC-Rio (Brazil).
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"Trade Liberalization and the Evolution of Skill Earnings Differentials in Brazil ,"
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"Do Firms Share their Success with Workers? The Response of Wages to Product Market Conditions ,"
Economica ,
London School of Economics and Political Science, vol. 70(280), pages 597-617, November.
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references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
Martins, Pedro S. & Esteves, Luiz A., 2008.
"Foreign Ownership, Employment and Wages in Brazil: Evidence from Acquisitions, Divestments and Job Movers ,"
IZA Discussion Papers
3542, Institute for the Study of Labor (IZA).
[Downloadable!]
Other versions:
Pedro S. Martins & Luiz A. Esteves, 2008.
"Foreign Ownership, Employment and Wages in Brazil: Evidence from Acquisitions, Divestments and Job Movers ,"
Working Papers
0079, Universidade Federal do Paraná, Department of Economics.
[Downloadable!] Pedro S. Martins & Luiz A. Esteves, 2008.
"Foreign Ownership, Employment and Wages in Brazil: Evidence from Acquisitions, Divestments and Job Movers ,"
Working Papers
15, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
[Downloadable!] Armando João Dalla Costa, 2005.
"Sucessão E Sucesso Nas Empresas Familiares ,"
Working Papers
0017, Universidade Federal do Paraná, Department of Economics.
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Luiz A. Esteves & Pedro S. Martins, 2008.
"Is firm performance driven by fairness or tournaments? Evidence from Brazilian matched data ,"
Working Papers
16, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
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Anna Karolina Selhorst Bezerra & Luciano Nakabashi, 2008.
"O Programa Comunidade Escola e seus impactos sobre a violência entre Crianças e Jovens ,"
Working Papers
0076, Universidade Federal do Paraná, Department of Economics.
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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.
[Downloadable!]
Other versions:
Pedro S. Martins & Luiz A. Esteves, 2006.
"Is There Rent Sharing In Developing Countries? Matched-Panel Evidence from Brazil ,"
IZA Discussion Papers
2317, Institute for the Study of Labor (IZA).
[Downloadable!] Pedro S. Martins & Luiz Alberto Esteves, 2006.
"Is There Rent Sharing In Developing Countries? Matched-Panel Evidence From Brazil ,"
Anais do XXXIV Encontro Nacional de Economia [Proceedings of the 34th Brazilian Economics Meeting]
158, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
[Downloadable!] Pedro Martins & Luiz Alberto Esteves, 2007.
"Is There Rent Sharing In Developing Countries? Matched-Panel Evidence from Brazil ,"
Working Papers
0060, Universidade Federal do Paraná, Department of Economics.
[Downloadable!]
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