IDEAS home Printed from https://ideas.repec.org/a/iab/iabzaf/v2005i2-3p147-164.html
   My bibliography  Save this article

Industrierenten und Lohnsetzungsverhalten : gibt es Indizien für die Insider-Outsider Hypothese? (Industry rents and wage settings behaviour * is there evidence to support the insider-outsider hypothesis?)

Author

Listed:
  • Möller, Joachim

    () (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])

Abstract

"The insider-outsider theory is one of the approaches with which the persistence of unemployment can be accounted for. The central hypothesis says that the insiders, in other words the 'job holders', drive the wage level above the market-clearing level, thus creating a barrier that prevents new hirings. Due to the existence of hiring costs, e.g. search costs, training costs and the costs for lay-offs e.g. redundancy payments, insiders possess market power. According to the insider-outsider theory, insiders exploit this market power in order to expropriate rents. This paper first examines whether there is evidence of the existence of such rents. Following more recent articles in the literature, we measure the size and temporal course of the rents on the basis of inter-industry wage differentials. These are estimated and analysed using data from the IAB employment sample. Furthermore we look into the hypothesis derived from the insider-outsider theory which says that industries with comparatively high rents demonstrate a high average employment duration. Finally we test a specific wage formation pattern that is expected in the case of insider behaviour (comparatively high wage increases during periods of economic recovery). The results show that there is indeed some evidence that 'job holders' cream off rents to a certain extent. In the industries with high rents there are indications of overly high wage increases particularly during periods of expansion. However, the results of some of the estimates are only weakly statistically firm. Further research is therefore needed in order to substantiate (or refute) the empirical evidence of the insider-outsider hypothesis. " (Author's abstract, IAB-Doku) ((en))

Suggested Citation

  • Möller, Joachim, 2005. "Industrierenten und Lohnsetzungsverhalten : gibt es Indizien für die Insider-Outsider Hypothese? (Industry rents and wage settings behaviour * is there evidence to support the insider-outsider hypothe," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 38(2/3), pages 147-164.
  • Handle: RePEc:iab:iabzaf:v:2005:i:2/3:p:147-164
    as

    Download full text from publisher

    File URL: http://doku.iab.de/zaf/2005/2005_2-3_zaf_moeller.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Mortensen, Dale & Pissarides, Christopher, 2011. "Job Creation and Job Destruction in the Theory of Unemployment," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 1, pages 1-19.
    2. Stephen Nickell, 2003. "Labour Market Institutions and Unemployment in OECD Countries," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 1(2), pages 13-26, October.
    3. Schlicht, Ekkehart, 1978. "Labour Turnover, Wage Structure, and Natural Unemployment," Munich Reprints in Economics 1255, University of Munich, Department of Economics.
    4. Robert Gibbons & Lawrence Katz, 1992. "Does Unmeasured Ability Explain Inter-Industry Wage Differentials?," Review of Economic Studies, Oxford University Press, vol. 59(3), pages 515-535.
    5. Saint-Paul, Gilles, 2000. "The Political Economy of Labour Market Institutions," OUP Catalogue, Oxford University Press, number 9780198293323.
    6. Solow, Robert M., 1979. "Another possible source of wage stickiness," Journal of Macroeconomics, Elsevier, vol. 1(1), pages 79-82.
    7. Wagner, Joachim, 1990. "An international comparison of sector wage differentials," Economics Letters, Elsevier, vol. 34(1), pages 93-97, September.
    8. Krueger, Alan B & Summers, Lawrence H, 1988. "Efficiency Wages and the Inter-industry Wage Structure," Econometrica, Econometric Society, vol. 56(2), pages 259-293, March.
    9. Edin, Per-Anders & Zetterberg, Johnny, 1992. "Interindustry Wage Differentials: Evidence from Sweden and a Comparison with the United States," American Economic Review, American Economic Association, vol. 82(5), pages 1341-1349, December.
    10. 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.
    Full references (including those not matched with items on IDEAS)

    Corrections

    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:iab:iabzaf:v:2005:i:2/3:p:147-164. 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: (IAB, Geschäftsbereich Dokumentation und Bibliothek). General contact details of provider: http://edirc.repec.org/data/iabbbde.html .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.