1. Understanding inter-industry wage structures in the euro area
- Author
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Genre, Véronique, Kohn, Karsten, and Momferatou, Daphne
- Subjects
firm and workforce characteristics ,Kapitalintensität ,J24 ,Sektorale Lohnstruktur ,Arbeitsmarktflexibilität ,inter-industry wage differentials ,Humankapital ,Europäische Wirtschafts- und Währungsunion ,ddc:330 ,Euro area ,Arbeitsmarktflexibilisierung ,EU-Staaten ,J51 ,Eurozone ,J31 ,panel estimation ,Produktivität ,labour market institutions - Abstract
This paper focuses on the euro area wage structure and its potential determinants from a sectoral viewpoint. Merging information from the OECD Structural Analysis database with data from the EU Labour Force Survey, we construct a cross-country panel of 22 industries in 8 euro area countries for 1991-2002. Data inspection confirms the existence of a fairly stable inter-industry wage structure that is similar across countries. We then apply panel data techniques to identify factors explaining inter-industry wage differentials in the euro area. Both workforce characteristics (e.g., human capital variables) and firm-related characteristics (e.g., capital intensity, productivity) contribute significantly. However, considerable wage heterogeneity across sectors remains. Idiosyncratic sector and country specifics, reflecting different socio-cultural and institutional backgrounds, appear to bear a major role. While our empirical analysis only uses direct evidence from workforce and firm-related characteristics, we also try to relate the remaining heterogeneity to institutional characteristics, based on related literature.
- Published
- 2009