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Wages and Seniority When Coworkers Matter: Estimating a Joint Production Economy Using Norwegian Administrative Data

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Author Info
Ferrall, Christopher () (Queen's University)
Salvanes, Kjell G. () (Norwegian School of Economics and Business Administration)
Sorensen, Erik () (Norwegian School of Economics and Business Administration)

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Abstract

We develop an equilibrium model of wages and estimate it using administrative data from Norway. Coworkers interact through a task­-assignment model, and wages are determined through multi­lateral bargaining over the surplus that accrues to the workforce. Seniority affects wages through workplace output and relative bargaining power. These channels are separately identified by imposing equilibrium restrictions on data observing all workers within workplaces. We find joint production is important. Seniority affects bargaining power but is unproductive. We reinterpret gender and firm­-size effects in wages in light of the rejection of linearly separable production.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4130.

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Length: 51 pages
Date of creation: Apr 2009
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Handle: RePEc:iza:izadps:dp4130

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Related research
Keywords: wage distributions; productivity; matched data; multilateral bargaining; assignment models;

Other versions of this item:

Find related papers by JEL classification:
D2 - Microeconomics - - Production and Organizations
J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
J7 - Labor and Demographic Economics - - Labor Discrimination

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This page was last updated on 2009-11-23.

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