IDEAS home Printed from
   My bibliography  Save this article

Product market regulation and wage premia in Europe and North America: An empirical investigation


  • Sébastien Jean
  • Giuseppe Nicoletti


The paper explores the link between wage premia and the determinants of product market rents. We first estimate 2-digit industry premia from 1996 wage earnings data by category of worker (age, sex, education and type of contract) in 10 European countries, the US and Canada. Using industry-specific regulation data, we then look at the effects of restrictions to competition and public ownership on wage premia in non-manufacturing industries, where regulatory conditions vary the most and are better documented. We find that, given workers? bargaining power, anticompetitive regulations significantly increase wage premia, reflecting the presence of rents. However, premia decline in industries dominated by legal public monopolies, suggesting a hump-shaped relationship between regulation and premia. We show that the hump-shape is consistent with a model of non-pecuniary rent-sharing between workers and a populist public monopolist.

Suggested Citation

  • Sébastien Jean & Giuseppe Nicoletti, 2015. "Product market regulation and wage premia in Europe and North America: An empirical investigation," International Economics, CEPII research center, issue 144, pages 1-28.
  • Handle: RePEc:cii:cepiie:2015-q4-144-1

    Download full text from publisher

    File URL:
    Download Restriction: no

    Other versions of this item:

    More about this item


    Regulation; Competition; Wage premia; Rent-sharing; Panel data;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cii:cepiie:2015-q4-144-1. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.