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Wages And Seniority When Coworkers Matter: Estimating A Joint Production Economy Using Norwegian Administrative Data

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  • Ferrall, Christopher
  • Salvanes, Kjell G.
  • Sorensen, Erik O.

Abstract

We develop an equilibrium model of wages and estimate it using administrative data from Norway. Coworkers interact through a task­assignment model, and wages are de- termined through multi­lateral bargaining over the surplus that accrues to the workforce. Seniority affects wages through workplace output and relative bargaining power. These channels are separately identified by imposing equilibrium restrictions on data observing all workers within workplaces. We find joint production is important. Seniority affects bargaining power but is unproductive. We reinterpret gender and firm-­size effects in wages in light of the rejection of linearly separable production.

Suggested Citation

  • Ferrall, Christopher & Salvanes, Kjell G. & Sorensen, Erik O., 2009. "Wages And Seniority When Coworkers Matter: Estimating A Joint Production Economy Using Norwegian Administrative Data," Queen's Economics Department Working Papers 273686, Queen's University - Department of Economics.
    • Handle: RePEc:ags:quedwp:273686
    DOI: 10.22004/ag.econ.273686
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    3. Jeremy T. Fox, 2009. "Firm-Size Wage Gaps, Job Responsibility, and Hierarchical Matching," Journal of Labor Economics, University of Chicago Press, vol. 27(1), pages 83-126, January.

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    Keywords

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    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • J7 - Labor and Demographic Economics - - Labor Discrimination

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