Reflections on the Inter-Industry Wage Structure

Abstract

This paper reviews available evidence on the inter-industry wage structure. The inter-industry wage structure is remarkably similar in different eras, in different countries, and among different types of workers. Industries with high capital-to-labor ratios, monopoly power and high profits pay relatively high wages. We conclude that the competitive model cannot without substantial modification provide an adequate explanation of theinter-industry wage structure. The implications of this finding for micro and macro economic theory and policy are examined.