Do Firms Share their Success with Workers? The Response of Wages to Product Market Conditions
We provide new evidence that industry financial conditions help determine wages in the US manufacturing sector. Ordinary least squares estimates of the effect of rents per worker on wages are significantly positive, but quite small. We show that this may stem from econometric difficulties that plague the OLS estimates. Using the US input-output tables to isolate demand shocks, we overcome these issues and identify the effects of the industry financial situation on wages. Our IV estimates reveal substantial rent sharing-much more than is consistent with a purely competitive labour market. Copyright (c) The London School of Economics and Political Science 2003.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 70 (2003)
Issue (Month): 280 (November)
|Contact details of provider:|| Postal: Houghton Street, London WC2A 2AE|
Phone: +44 (020) 7405 7686
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0013-0427
More information through EDIRC
|Order Information:||Web: http://www.blackwellpublishing.com/subs.asp?ref=0013-0427|
References listed on IDEAS
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.:
- McDonald, Ian M & Solow, Robert M, 1981. "Wage Bargaining and Employment," American Economic Review, American Economic Association, vol. 71(5), pages 896-908, December.
- William T. Dickens & Lawrence F. Katz, 1986. "Interindustry Wage Differences and Industry Characteristics," NBER Working Papers 2014, National Bureau of Economic Research, Inc.
- Marcello Estevao & Stacey Tevlin, 1995. "The role of profits in wage determination: evidence from US manufacturing," Finance and Economics Discussion Series 95-48, Board of Governors of the Federal Reserve System (U.S.).
- Hilderth, A.K. & Oswald, A.J., 1993.
"Rent-Sharing and Wages: Evidence form Company and Establishment Panels,"
Economics Series Working Papers
99154, University of Oxford, Department of Economics.
- Hildreth, Andrew K G & Oswald, Andrew J, 1997. "Rent-Sharing and Wages: Evidence from Company and Establishment Panels," Journal of Labor Economics, University of Chicago Press, vol. 15(2), pages 318-337, April.
- Hildreth, Andrew K G & Oswald, Andrew J, 1994. "Rent-Sharing and Wages: Evidence from Company and Establishment Panels," Economics Discussion Papers 10024, University of Essex, Department of Economics.
- Joshua D. Angrist & Alan B. Krueger, 1995.
"Split Sample Instrumental Variables,"
NBER Technical Working Papers
0150, National Bureau of Economic Research, Inc.
- Nickell, Stephen & Kong, Paul, 1992. "An investigation into the power of insiders in wage determination," European Economic Review, Elsevier, vol. 36(8), pages 1573-1599, December.
- Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-444, June.
- Kevin Denny & Machin, S, 1991. "The role of profitability and industrial wages in firm level wage determination," Fiscal Studies, Institute for Fiscal Studies, vol. 12(2), pages 34-45, May.
- John Van Reenen, 1996.
"The Creation and Capture of Rents: Wages and Innovation in a Panel of U. K. Companies,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 111(1), pages 195-226.
- Van Reenen, John, 1994. "The Creation and Capture of Rents: Wages and Innovation in a Panel of UK Companies," CEPR Discussion Papers 1071, C.E.P.R. Discussion Papers.
- Shea, John, 1993. "The Input-Output Approach to Instrument Selection," Journal of Business & Economic Statistics, American Statistical Association, vol. 11(2), pages 145-155, April.
- John M. Abowd, 1990. "The NBER Immigration, Trade, and Labor Markets Data Files," NBER Working Papers 3351, National Bureau of Economic Research, Inc.
- David G. Blanchflower & Andrew J. Oswald & Peter Sanfey, 1992.
"Wages, Profits and Rent-Sharing,"
NBER Working Papers
4222, National Bureau of Economic Research, Inc.
- Akerlof, George A & Yellen, Janet L, 1988. "Fairness and Unemployment," American Economic Review, American Economic Association, vol. 78(2), pages 44-49, May.
- Angrist, Joshua D & Krueger, Alan B, 1995. "Split-Sample Instrumental Variables Estimates of the Return to Schooling," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(2), pages 225-235, April.
- Layard, Richard & Nickell, Stephen & Jackman, Richard, 1991.
"Unemployment: Macroeconomic Performance and the Labour Market,"
Oxford University Press, number 9780198284345, December.
- Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173, December.
- L Christofides & A Oswald, 1991.
"Real Wage Determination and Rent-Sharing in Collective Bargaining Agreements,"
CEP Discussion Papers
dp0042, Centre for Economic Performance, LSE.
- Louis N. Christofides & Andrew J. Oswald, 1992. "Real Wage Determination and Rent-Sharing in Collective Bargaining Agreements," The Quarterly Journal of Economics, Oxford University Press, vol. 107(3), pages 985-1002.
- John M. Abowd & Henry S. Farber, 1990. "Product Market Competition, Union Organizing Activity, and Employer Resistence," NBER Working Papers 3353, National Bureau of Economic Research, Inc.
- Assar Lindbeck & Dennis J. Snower, 1989. "The Insider-Outsider Theory of Employment and Unemployment," MIT Press Books, The MIT Press, edition 1, volume 1, number 026262074x.
- Alan B. Krueger & Lawrence H. Summers, 1986. "Reflections on the Inter-Industry Wage Structure," NBER Working Papers 1968, National Bureau of Economic Research, Inc.
- Salop, Steven C, 1979. "A Model of the Natural Rate of Unemployment," American Economic Review, American Economic Association, vol. 69(1), pages 117-125, March.
When requesting a correction, please mention this item's handle: RePEc:bla:econom:v:70:y:2003:i:280:p:597-617. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.