Microdata Evidence on Rent-Sharing
We examine the effect of firm profits on wages for individual workers while focusing on the empirical complications associated with estimating the extent of rent-sharing. Controlling for worker and firm fixed-effects and using several instruments to deal with the endogeneity of profits, we report results indicating that OLS-estimates strongly underestimate the effects of profits on wages. Moreover, the effect of profits on wages are estimated separately for firms with increasing and decreasing profits within a given time period. We find a positive and stable effect only in firms with increasing profits. This is in line with the idea that falling profits do not lead to wage cuts while increasing profits imply higher wages.
|Date of creation:||15 Dec 2004|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.fief.se/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Robert Gibbons & Lawrence F. Katz, 1989.
"Does Unmeasured Ability Explain Inter-Industry Wage Differentials?,"
NBER Working Papers
3182, National Bureau of Economic Research, Inc.
- Gibbons, Robert & Katz, Lawrence F, 1992. "Does Unmeasured Ability Explain Inter-industry Wage Differentials?," Review of Economic Studies, Wiley Blackwell, vol. 59(3), pages 515-35, July.
- Alan Manning, 1992.
"How Robust is the Microeconomic theory of the Trade Union?,"
CEP Discussion Papers
dp0065, Centre for Economic Performance, LSE.
- Manning, Alan, 1994. "How Robust Is the Microeconomic Theory of the Trade Union?," Journal of Labor Economics, University of Chicago Press, vol. 12(3), pages 430-59, July.
- Marcello Estevao & Stacey Tevlin, 2000.
"Do firms share their success with workers? The response of wages to product market conditions,"
Finance and Economics Discussion Series
2000-17, Board of Governors of the Federal Reserve System (U.S.).
- Marcello Estevao & Stacey Tevlin, 2003. "Do Firms Share their Success with Workers? The Response of Wages to Product Market Conditions," Economica, London School of Economics and Political Science, vol. 70(280), pages 597-617, November.
- David Margolis & Kjell G, Salvanes, 2001.
"Do Firms Really Share Rents with their Workers,"
2001-16, Centre de Recherche en Economie et Statistique.
- Margolis, David N. & Salvanes, Kjell G., 2001. "Do Firms Really Share Rents with Their Workers?," IZA Discussion Papers 330, Institute for the Study of Labor (IZA).
- 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-.
- Oswald, Andrew J, 1982. "The Microeconomic Theory of the Trade Union," Economic Journal, Royal Economic Society, vol. 92(367), pages 576-95, September.
- Holmlund, Bertil & Zetterberg, Johnny, 1991.
"Insider effects in wage determination : Evidence from five countries,"
European Economic Review,
Elsevier, vol. 35(5), pages 1009-1034, July.
- Holmlund, B. & Zetterberg, J., 1989. "Insider Effects In Wage Determination: Evidence From Five Countries," Papers 1989a, Uppsala - Working Paper Series.
- Nekby, Lena, 2002. "Gender Differences in Rent Sharing and its Implications for the Gender Wage Gap," Working Paper Series 182, Trade Union Institute for Economic Research.
- Moulton, Brent R, 1990. "An Illustration of a Pitfall in Estimating the Effects of Aggregate Variables on Micro Unit," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 334-38, May.
- Agell, Jonas & Lundborg, Per, 1999. "Survey Evidence on Wage Rigidity: Sweden in the 1990s," Working Paper Series 154, Trade Union Institute for Economic Research.
When requesting a correction, please mention this item's handle: RePEc:hhs:fiefwp:0198. 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: (Sune Karlsson)
If references are entirely missing, you can add them using this form.