Do Firms Share their Success with Workers? The Response of Wages to Product Market Conditions

Bibliographic Data

ID9725957
AuthorsMarcello Estevão (International Monetary Fund), Stacey Tevlin (Federal Reserve)
Year2003
Volume70
Issue280
Pages597-617
Publication date2003-11-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueEconomica (JOURNAL)
Journal identifiersISSN: 0013-0427 • E-ISSN: 1468-0335
PublisherWiley (PUBLISHER • GB)
DOI10.1046/j.0013-0427.2003.01059.x
OpenAlexW1975133365
LanguageEN
Citations received4
References cited21

We provide new evidence that industry financial conditions help determine wages in the US manufacturing sector. Ordinary least squares estimates of the effect of rents per worker on wages are significantly positive, but quite small. We show that this may stem from econometric difficulties that plague the OLS estimates. Using the US input–output tables to isolate demand shocks, we overcome these issues and identify the effects of the industry financial situation on wages. Our IV estimates reveal substantial rent sharing—much more than is consistent with a purely competitive labour market

Econometrics · Economic rent · Economics · Incentive · Labour economics · Microeconomics · Ordinary least squares · Product (mathematics) · Product market · Wage · Housing, Finance, and Neoliberalism · Labor market dynamics and wage inequality · Labor Movements and Unions

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