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| Author: | Estevao, M. Tevlin, S. |
| Title: | Do firms share their success with workers? The response of wages to product market conditions |
| Journal: | Economica
2003 : NOV, VOL. 70:280, p. 597-617 |
| Index terms: | Labour markets Pay Manufacturing USA |
| Language: | eng |
| Abstract: | This paper provides new evidence that industry financial conditions help determine wages in the U.S. manufacturing sector. Ordinary least squares estimates of the effect of rents per worker on wages are significantly positive, but quite small. It is shown that this may stem from econometric difficulties that plague the OLS estimates. Using the U.S. input–output tables to isolate demand shocks, this paper overcomes these issues and identify the effects of the industry financial situation on wages. The paper's IV estimates reveal substantial rent sharing—much more than is consistent with purely competitive labour market. |
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