IDEAS home Printed from https://ideas.repec.org/p/hhs/aareco/2007_005.html
   My bibliography  Save this paper

My Pay is Too Bad (I Quit). Your Pay is Too Good (You're Fired)

Author

Listed:

Abstract

This paper is about how surpluses of labour contracts are shared by the employee and her firm. For this purpose, I look at the relationship between individual wages and employeremployee separation patterns. The paper suggests a model which estimates (otherwise unobserved) alternative wage and individual productivity measures from matched employer-employee data. These estimates can be used to address rent sharing hypotheses. Results of an application of the model to a large Danish register data set suggest that firms appropriate large shares of the returns to tenure. There is no evidence of gender discrimination with respect to rent sharing, and no evidence of rent sharing coefficients being different across regions which are distinguished by their labour market thickness.

Suggested Citation

  • Kuhn, Johan Moritz, 2007. "My Pay is Too Bad (I Quit). Your Pay is Too Good (You're Fired)," Working Papers 07-5, University of Aarhus, Aarhus School of Business, Department of Economics.
  • Handle: RePEc:hhs:aareco:2007_005
    as

    Download full text from publisher

    File URL: http://www.hha.dk/nat/wper/07-5_jmk.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Lazear, Edward P & Rosen, Sherwin, 1981. "Rank-Order Tournaments as Optimum Labor Contracts," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 841-864, October.
    2. Hall, Robert E & Lazear, Edward P, 1984. "The Excess Sensitivity of Layoffs and Quits to Demand," Journal of Labor Economics, University of Chicago Press, vol. 2(2), pages 233-257, April.
    3. Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," Journal of Political Economy, University of Chicago Press, vol. 70, pages 1-9.
    4. Judith K. Hellerstein & David Neumark & Kenneth R. Troske, 2002. "Market Forces and Sex Discrimination," Journal of Human Resources, University of Wisconsin Press, vol. 37(2), pages 353-380.
    5. James L. Medoff & Katharine G. Abraham, 1981. "Are Those Paid More Really More Productive? The Case of Experience," Journal of Human Resources, University of Wisconsin Press, vol. 16(2), pages 186-216.
    6. Pedro Martins, 2009. "Rent sharing before and after the wage bill," Applied Economics, Taylor & Francis Journals, vol. 41(17), pages 2133-2151.
    7. Margolis, D.N. & Salvanes, K.G., 2001. "Do Firms Really Share Rents with Their Workers?," Papers 11/2001, Norwegian School of Economics and Business Administration-.
    8. Bent Jesper Christensen & Rasmus Lentz & Dale T. Mortensen & George R. Neumann & Axel Werwatz, 2005. "On-the-Job Search and the Wage Distribution," Journal of Labor Economics, University of Chicago Press, vol. 23(1), pages 31-58, January.
    9. Oswald, Andrew, 1996. "Rent-Sharing in the Labor Market," The Warwick Economics Research Paper Series (TWERPS) 474, University of Warwick, Department of Economics.
    10. Gielen, A. C. & van Ours, J.C., 2006. "Why do Worker-Firm Matches Dissolve?," Discussion Paper 2006-57, Tilburg University, Center for Economic Research.
    11. Erling Barth & Harald Dale-Olsen, 1999. "Monopsonistic Discrimination and the Gender-Wage Gap," NBER Working Papers 7197, National Bureau of Economic Research, Inc.
    12. David Blackaby & Alison L Booth & Jeff Frank, 2005. "Outside Offers And The Gender Pay Gap: Empirical Evidence From the UK Academic Labour Market," Economic Journal, Royal Economic Society, vol. 115(501), pages 81-107, February.
    13. David Blackaby & Alison L Booth & Jeff Frank, 2005. "Outside Offers And The Gender Pay Gap: Empirical Evidence From the UK Academic Labour Market," Economic Journal, Royal Economic Society, vol. 115(501), pages 81-107, February.
    14. Blau, Francine D & Kahn, Lawrence M, 1992. "The Gender Earnings Gap: Learning from International Comparisons," American Economic Review, American Economic Association, vol. 82(2), pages 533-538, May.
    15. Nekby, Lena, 2003. "Gender differences in rent sharing and its implications for the gender wage gap, evidence from Sweden," Economics Letters, Elsevier, vol. 81(3), pages 403-410, December.
    16. McLaughlin, Kenneth J, 1994. "Rent Sharing in an Equilibrium Model of Matching and Turnover," Journal of Labor Economics, University of Chicago Press, vol. 12(4), pages 499-523, October.
    17. Gerard A. Pfann, 2006. "Downsizing and Heterogeneous Firing Costs," The Review of Economics and Statistics, MIT Press, vol. 88(1), pages 158-170, February.
    18. Harvey, A C, 1976. "Estimating Regression Models with Multiplicative Heteroscedasticity," Econometrica, Econometric Society, vol. 44(3), pages 461-465, May.
    19. Lazear, Edward P, 1979. "Why Is There Mandatory Retirement?," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1261-1284, December.
    20. Mahmood Arai & Fredrik Heyman, 2009. "Microdata evidence on rent-sharing," Applied Economics, Taylor & Francis Journals, vol. 41(23), pages 2965-2976.
    21. Pekka Ilmakunnas & Mika Maliranta, 2005. "Technology, Labour Characteristics and Wage-productivity Gaps," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 67(5), pages 623-645, October.
    22. David G. Blanchflower & Andrew J. Oswald & Peter Sanfey, 1996. "Wages, Profits, and Rent-Sharing," The Quarterly Journal of Economics, Oxford University Press, vol. 111(1), pages 227-251.
    23. Suen, Wing, 2000. "Testing Rent Sharing Using Individualized Measures of Rent: Evidence from Domestic Helpers," Economic Inquiry, Western Economic Association International, vol. 38(3), pages 470-486, July.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    employer-employee separations; rent sharing;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General

    Statistics

    Access and download statistics

    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:hhs:aareco:2007_005. 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: (Helle Vinbaek Stenholt). General contact details of provider: http://edirc.repec.org/data/nihhadk.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.