IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/6109.html
   My bibliography  Save this paper

Internal and External Labor Markets: An Analysis of Matched Longitudinal Employer-Employee Data

Author

Listed:
  • John M. Abowd
  • Francis Kramarz

Abstract

We decompose the real annual full time compensation costs of 1.1 million French workers followed over 12 years into a part that reflects their external opportunity wage and a part that reflects their internal wage rate. Using these components of compensation we investigate the extent to which firm-size wage differentials and inter-industry wage differentials are due to variability in the external wage (person effects) versus variability in the internal wage (firm effects). For France, we find that most of the firm-size wage effect and most of the inter-industry wage effect is due to person effects differences in the external wage rates.

Suggested Citation

  • John M. Abowd & Francis Kramarz, 1997. "Internal and External Labor Markets: An Analysis of Matched Longitudinal Employer-Employee Data," NBER Working Papers 6109, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:6109
    Note: LS
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w6109.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1.
    2. Brown, Charles & Medoff, James, 1989. "The Employer Size-Wage Effect," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1027-1059, October.
    3. 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.
    4. Cain, Glen G, 1976. "The Challenge of Segmented Labor Market Theories to Orthodox Theory: A Survey," Journal of Economic Literature, American Economic Association, vol. 14(4), pages 1215-1257, December.
    5. Jacob A. Mincer, 1974. "Schooling and Earnings," NBER Chapters, in: Schooling, Experience, and Earnings, pages 41-63, National Bureau of Economic Research, Inc.
    6. Willis, Robert J., 1987. "Wage determinants: A survey and reinterpretation of human capital earnings functions," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 1, chapter 10, pages 525-602, Elsevier.
    7. repec:eee:labchp:v:1:y:1986:i:c:p:525-602 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Beatriz Muriel, 2011. "Rethinking Earnings Determinants in the Urban Areas of Bolivia," Development Research Working Paper Series 06/2011, Institute for Advanced Development Studies.
    2. Beatriz Muriel Hernández, 2016. "An Analysis of Firm Characteristics as Earnings Determinants: The Urban Bolivia Case," Development Research Working Paper Series 04/2016, Institute for Advanced Development Studies.
    3. repec:eee:labchp:v:3:y:1999:i:pb:p:2629-2710 is not listed on IDEAS

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Antoni, Manfred & Janser, Markus & Lehmer, Florian, 2015. "The hidden winners of renewable energy promotion: Insights into sector-specific wage differentials," Energy Policy, Elsevier, vol. 86(C), pages 595-613.
    2. John M. Abowd & Francis Kramarz & Claude Jessua, 1996. "Les politiques salariales : individus et entreprises," Revue Économique, Programme National Persée, vol. 47(3), pages 611-622.
    3. Nuno Crespo & Nádia Simões & José Castro Pinto, 2013. "Determinant factors of job quality in Europe," Working Papers Series 2 13-01, ISCTE-IUL, Business Research Unit (BRU-IUL).
    4. Veronique Genre & Karsten Kohn & Daphne Momferatou, 2011. "Understanding inter-industry wage structures in the euro area," Applied Economics, Taylor & Francis Journals, vol. 43(11), pages 1299-1313.
    5. James Kliebenstein & Peter F. Orazem, 1999. "The Structure of Wages and Benefits in the U.S. Pork Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(1), pages 144-163.
    6. Huang, Tzu-Ling & Hallam, Arne & Orazem, Peter & Paterno, Elizabeth M., 1998. "Empirical Tests of Efficiency Wage Models," Staff General Research Papers Archive 1325, Iowa State University, Department of Economics.
    7. David Neumark & Steven A. Sharpe, 1992. "Hostile Takeovers and Expropriation of Extramarginal Wages: A Test," NBER Working Papers 4101, National Bureau of Economic Research, Inc.
    8. Beatriz Muriel Hernández, 2016. "An Analysis of Firm Characteristics as Earnings Determinants: The Urban Bolivia Case," Development Research Working Paper Series 04/2016, Institute for Advanced Development Studies.
    9. Peydró, José-Luis & Jasova, Martina & Mendicino, Caterina & Panetti, Ettore & Supera, Dominik, 2021. "Monetary Policy, Labor Income Redistribution and the Credit Channel: Evidence from Matched Employer-Employee and Credit Registe," CEPR Discussion Papers 16549, C.E.P.R. Discussion Papers.
    10. Philip Du Caju & François Rycx & Ilan Tojerow, 2011. "Inter‐Industry Wage Differentials: How Much Does Rent Sharing Matter?," Manchester School, University of Manchester, vol. 79(4), pages 691-717, July.
    11. Robert Plasman & François Rycx & Ilan Tojerow, 2007. "Wage differentials in Belgium: the role of worker and employer characteristics," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 50(1), pages 11-40.
    12. Erling Barth & James Davis & Richard B. Freeman, 2018. "Augmenting the Human Capital Earnings Equation with Measures of Where People Work," Journal of Labor Economics, University of Chicago Press, vol. 36(S1), pages 71-97.
    13. Orley Ashenfelter & Cecilia Rouse, 1998. "Income, Schooling, and Ability: Evidence from a New Sample of Identical Twins," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(1), pages 253-284.
    14. López Enciso, Enrique & Ramírez Giraldo, María Teresa (ed.), 2011. "Formación de precios y salarios en Colombia T.2," Books, Banco de la Republica de Colombia, volume 2, number 2011b-04, July.
    15. David Card & Ana Rute Cardoso & Joerg Heining & Patrick Kline, 2018. "Firms and Labor Market Inequality: Evidence and Some Theory," Journal of Labor Economics, University of Chicago Press, vol. 36(S1), pages 13-70.
    16. Maritza López-Novella & Salimata Sissoko, 2009. "Working Paper 12-09 - Salaires et négociation collective en Belgique : une analyse microéconomique en panel," Working Papers 0912, Federal Planning Bureau, Belgium.
    17. Elżbieta Stępień, 2009. "The Impact of International Trade and Foreign Competition on Labour Earnings in Poland," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 24.
    18. Cindy Zoghi, 2010. "Measuring Labor Composition: A Comparison of Alternate Methodologies," NBER Chapters, in: Labor in the New Economy, pages 457-485, National Bureau of Economic Research, Inc.
    19. Luis P. Correia, 2006. "Schooling, learning on-the-job, earnings and inequality," Bristol Economics Discussion Papers 06/585, School of Economics, University of Bristol, UK.
    20. John Mullahy & Jody L. Sindelar, 1991. "Alcoholism, Work, and Income Over the Life Cycle," NBER Working Papers 3909, National Bureau of Economic Research, Inc.

    More about this item

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory

    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:nbr:nberwo:6109. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.