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Do Operating Profits Induce a Wage Premium Equally Shared among Employees Earning High or Low Incomes?

Author

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  • Jarle Aarstad

    (Mohn Centre for Innovation and Regional Development, Western Norway University of Applied Sciences, P.O. Box 7030, NO-5020 Bergen, Norway)

  • Olav A. Kvitastein

    (Mohn Centre for Innovation and Regional Development, Western Norway University of Applied Sciences, P.O. Box 7030, NO-5020 Bergen, Norway)

Abstract

Panel data show that between 2001 and 2014 Norwegian industries’ increasing aggregated operating profits per employee increased average wages and wage inequality. The data imply that increasing profits, perhaps unsurprisingly, induce a wage premium. The data further imply that employees earning high incomes at the outset had the highest wage increase percentage-wise. Decreasing operating profits per employee had opposite but less robust effects on average wages and wage inequality. Panel data Granger causality tests finally showed that average wages, but not wage inequality, reversely and positively affect operating profits per employee.

Suggested Citation

  • Jarle Aarstad & Olav A. Kvitastein, 2021. "Do Operating Profits Induce a Wage Premium Equally Shared among Employees Earning High or Low Incomes?," Economies, MDPI, vol. 9(2), pages 1-7, May.
    • Handle: RePEc:gam:jecomi:v:9:y:2021:i:2:p:81-:d:560106
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    References listed on IDEAS

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    Cited by:

    1. Jarle Aarstad & Olav Andreas Kvitastein, 2021. "Is Industry Size a Carrier for Wage Inequality? A Panel Study Addressing Independent Variables of Inherently Different Sizes across Units," JRFM, MDPI, vol. 14(9), pages 1-9, September.

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