Rent Sharing Before and After the Wage Bill

Arbeitspapier

Many biases plague the estimation of rent sharing in labour markets. Using a Portuguese matched employer-employee panel, these biases are addressed in this paper in three complementary ways: 1) Controlling directly for the fact that firms that share more rents will, ceteris paribus, have lower net-of-wages profits. 2) Instrumenting profits via interactions between the exchange rate and the share of exports in firms? total sales. 3) Considering firm or firm/worker spell fixed effects and highlighting the role of downward wage rigidity. These approaches clarify conflicting findings in the literature and result, in our preferred specification, in a Lester range of pay dispersion of 56%, also shown to be robust to a number of competitive interpretations.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 1376

Classification and Topics

• Classification: Wirtschaft ; Wage Level and Structure; Wage Differentials ; Multiple or Simultaneous Equation Models: Panel Data Models; Spatio-temporal Models ; Labor Contracts
• Subject: rent sharing ; instrumental variables ; matched employer-employee data ; fixed effects ; Erfolgsbeteiligung ; Lohnbildung ; Lohnverhandlungstheorie ; Bias ; Schätzung ; Portugal

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Martins, Pedro Silva
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2004

Further information

• Handle: http://hdl.handle.net/10419/20672
• Last update: 10.03.2025, 11:45 AM CET