Intangible capital and wages: An analysis of wage gaps across occupations and genders in Czech Republic, Finland and Norway

This paper compares the effects of intangible capital on wage formation among white-collar manufacturing workers using comparative data from three European countries: the Czech Republic, Finland and Norway. The analysis is undertaken in two steps. First, we explore the wage differentials and the underlying sources for two occupation groups: innovation and non-innovation workers. In a second step, this analysis is broken down by gender. We apply a decomposition method based on unconditional quantile regression techniques to examine the factors underlying the wage gaps observed along the whole wage distribution. The use of comparative cross-country data and a more elaborated wage decomposition method provides important new insights. We find, for example, that although innovation workers earn more than non-innovation workers in all three countries under scrutiny, there is considerable variation across the countries both in the levels and profiles of these wage differentials. Also the sources underlying these wage differentials vary between the countries. The levels and profiles of the gender wage gaps prevailing among innovation and non-innovation workers also reveal conspicuous cross-country differences. However, when it comes to the major sources contributing to these gender wage gaps, the results are strikingly similar across countries: what matters is marked gender differences in the rewards to similar basic human capital characteristics, not gender differences in these endowments.