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Wage differentials across sectors in Europe: an east-west comparison

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  • Iga Magda
  • François Rycx
  • Ilan Tojerow
  • Daphné Valsamis

Abstract

This study compares the structure and determinants of inter-industry wage differentials in Eastern and Western European countries (namely Belgium, Italy, the Netherlands, Norway, Portugal and Spain compared with Latvia, Lithuania, the Czech Republic, Poland and Slovakia). To do so, we use a unique harmonised, linked employer–employee data set, the 2002 European Structure of Earnings Survey. Findings show substantial differences in earnings across sectors in all countries, even when controlling for a wide range of employee, job and employer characteristics. The hierarchy of sectors in terms of wages appears to be quite similar in Eastern and Western European countries. Among high-wage sectors, we find the energy (coke, petroleum, gas, electricity and nuclear power), chemical, financial and computer industries. In contrast, it is in the traditional sectors (wood and cork industry, textile, clothing and leather industry, hotels and restaurants, and retailing) that wages are lowest. Further results suggest that the dispersion of inter-industry wage differentials fluctuates considerably across countries. It is relatively small in Norway and Belgium, large in the Netherlands, Italy, Spain, Poland and the Czech Republic, and very large in Portugal, Latvia, Lithuania and Slovakia. Our findings support the hypothesis of a negative relationship between the dispersion of inter-industry wage differentials and a country’s degree of corporatism.

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Paper provided by ULB -- Universite Libre de Bruxelles in its series Working Papers CEB with number 09-003.RS.

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Length: 24 p.
Date of creation: 2009
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Handle: RePEc:sol:wpaper:09-003

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Keywords: Inter-industry wage differentials; Collective bargaining; Europe; Matched employer-employee data.;

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Citations

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Cited by:
  1. Philip Du Caju & François Rycx & Ilan Tojerow, 2008. "Rent-Sharing and the Cyclicality of Wage Differentials," Working Papers CEB 08-035.RS, ULB -- Universite Libre de Bruxelles.
  2. Charles Plaigin, 2009. "Exploratory study on the presence of cultural and institutional growth spillovers," DULBEA Working Papers 09-03.RS, ULB -- Universite Libre de Bruxelles.
  3. Philip Du Caju & Gábor Kátay & Ana Lamo & Daphne Nicolitsas & Steven Poelhekke, 2010. "Inter-Industry Wage Differentials In EU Countries: What Do Cross-Country Time Varying Data Add to the Picture?," Journal of the European Economic Association, MIT Press, vol. 8(2-3), pages 478-486, 04-05.
  4. Pierre-Guillaume Méon & Ariane Szafarz, 2008. "Labour market discrimination as an agency cost," Working Papers CEB 08-019.RS, ULB -- Universite Libre de Bruxelles.
  5. Philip Du Caju & François Rycx & Ilan Tojerow, 2012. "Wage structure effects of international trade in a small open economy: the case of Belgium," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 148(2), pages 297-331, June.
  6. Bernal, Oscar & Oosterlinck, Kim & Szafarz, Ariane, 2010. "Observing bailout expectations during a total eclipse of the sun," Journal of International Money and Finance, Elsevier, vol. 29(7), pages 1193-1205, November.
  7. Rebekka Christopoulou & Theodora Kosma, 2009. "Skills and wage inequality in Greece: evidence from matched employer-employee data, 1995-2002," LSE Research Online Documents on Economics 24198, London School of Economics and Political Science, LSE Library.
  8. Parteka, Aleksandra & Wolszczak-Derlacz, Joanna, 2013. "Integrated Sectors - Diversified Earnings: The (Missing) Impact of Offshoring on Wages and Wage Convergence in the EU27," Institute for Research on Labor and Employment, Working Paper Series qt3tm2935j, Institute of Industrial Relations, UC Berkeley.
  9. repec:ese:iserwp:2009-13 is not listed on IDEAS
  10. Ilan Tojerow, 2008. "Industry Wage Differentials Rent Sharing and Gender in Belgium," Reflets et perspectives de la vie économique, De Boeck Université, vol. 0(3), pages 55-65.
  11. Nuno Crespo & Nádia Simões & José Castro Pinto, 2013. "Determinant factors of job quality in Europe," Working Papers Series 2 13-01, ISCTE-IUL, Business Research Unit (BRU-IUL).

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