IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Microdata Evidence on Rent-Sharing

  • Arai, Mahmood

    ()

    (Department of Economics, Stockholm University)

  • Heyman, Fredrik

    (Trade Union Institute for Economic Research)

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.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://swopec.hhs.se/fiefwp/papers/WP198.pdf
Download Restriction: no

Paper provided by Trade Union Institute for Economic Research in its series Working Paper Series with number 198.

as
in new window

Length: 27 pages
Date of creation: 15 Dec 2004
Date of revision:
Handle: RePEc:hhs:fiefwp:0198
Contact details of provider: Postal: Wallingatan 38, 4th floor S-111 24 Stockholm
Phone: +46-8-240450
Fax: +46-8-207313
Web page: http://www.fief.se/
Email:


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.:

as in new window
  1. Alan Manning, 1992. "How Robust is the Microeconomic theory of the Trade Union?," CEP Discussion Papers dp0065, Centre for Economic Performance, LSE.
  2. 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).
  3. 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.).
  4. 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.
  5. 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.
  6. 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.
  7. Agell, Jonas & Lundborg, Per, 1999. "Survey Evidence on Wage Rigidity: Sweden in the 1990s," Working Paper Series 154, Trade Union Institute for Economic Research.
  8. 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.
  9. Oswald, Andrew J, 1982. "The Microeconomic Theory of the Trade Union," Economic Journal, Royal Economic Society, vol. 92(367), pages 576-95, September.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

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 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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.