Ιnter-Industry Wage Differentials in EU Countries: What Do Cross-Country Time Varying Data Add to the Picture?

42 Pages Posted: 21 Jul 2022

See all articles by Daphne Nicolitsas

Daphne Nicolitsas

University of Crete - Department of Economics

Philip Du Caju

National Bank of Belgium

Gabor Katay

Banque de France

Ana Lamo

European Central Bank (ECB)

Steven Poelhekke

University of Auckland

Date Written: December 1, 2010

Abstract

This paper documents the existence and main patterns of inter-industry wage differentials across a large number of industries for 8 EU countries at two points in time and explores possible explanations for these. The analysis uses the European Structure of Earnings Survey (SES), an internationally harmonised matched employer-employee dataset, to estimate inter-industry wage differentials conditional on a set of employee, employer and job characteristics. After investigating the possibility that unobservable employee characteristics lie behind the conditional wage differentials, a hypothesis which cannot be accepted, the paper investigates the role of institutional, industry structure and performance characteristics in explaining inter-industry wage differentials. The results suggest that inter-industry wage differentials are consistent with rent sharing mechanisms and that rent sharing is more likely in industries with firm-level collective agreements and with higher collective agreement coverage.

Keywords: inter-industry wage differentials, rent sharing, unobserved ability

JEL Classification: J31, J41, J51

Suggested Citation

Nicolitsas, Daphne and Du Caju, Philip and Katay, Gabor and Lamo, Ana and Poelhekke, Steven, Ιnter-Industry Wage Differentials in EU Countries: What Do Cross-Country Time Varying Data Add to the Picture? (December 1, 2010). Bank of Greece Working Paper No. 121, Available at SSRN: https://ssrn.com/abstract=4166876 or http://dx.doi.org/10.2139/ssrn.4166876

Daphne Nicolitsas (Contact Author)

University of Crete - Department of Economics ( email )

Rethymno, GR-74100
Greece

Philip Du Caju

National Bank of Belgium ( email )

Research Department
Boulevard de Berlaimont 14
B-1000 Brussels, 1000
Belgium

Gabor Katay

Banque de France ( email )

Paris
France

Ana Lamo

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Steven Poelhekke

University of Auckland

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