Rent‐Sharing and Workers' Bargaining Power: An Empirical Cross‐Country/Cross‐Industry Panel Analysis

34 Pages Posted: 26 Mar 2018

See all articles by Philippe Askenazy

Philippe Askenazy

IZA Institute of Labor Economics; Paris School of Economics (PSE)

Gilbert Cette

Banque de France

Paul Maarek

Banque de France

Date Written: April 2018

Abstract

In this paper, we study how rents are shared between capital and labour, using industry‐level panel data for 19 OECD countries from 1988 through to 2007. The first step is an explanation of the rent‐creation process. We provide evidence of a significant impact of regulation on value‐added prices at the industry level relative to the value‐added price for the overall economy (rent). In the second step, we dissect the value‐added sharing process. By running ordinary least‐squares and instrumental variables estimations, we obtain results that confirm the Blanchard–Giavazzi prediction: the impact of rents on the capital share depends on workers' bargaining power.

Keywords: Capital share, market regulations, output gap, prices, rents, unemployment

Suggested Citation

Askenazy, Philippe and Cette, Gilbert and Maarek, Paul, Rent‐Sharing and Workers' Bargaining Power: An Empirical Cross‐Country/Cross‐Industry Panel Analysis (April 2018). The Scandinavian Journal of Economics, Vol. 120, Issue 2, pp. 563-596, 2018. Available at SSRN: https://ssrn.com/abstract=3149190 or http://dx.doi.org/10.1111/sjoe.12228

Philippe Askenazy (Contact Author)

IZA Institute of Labor Economics

Schaumburg-Lippe-Str. 7 / 9
Bonn, D-53072
Germany

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

Gilbert Cette

Banque de France ( email )

Paris
France

Paul Maarek

Banque de France ( email )

Paris
France

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