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Title:Understanding inter-industry wage structures in the euro area PDF Logo
Authors:Genre, Véronique
Kohn, Karsten
Momferatou, Daphne
Issue Date:2009
Series/Report no.:IZA discussion papers 4114
Abstract:This paper focuses on the euro area wage structure and its potential determinants from a sectoral viewpoint. Merging information from the OECD Structural Analysis database with data from the EU Labour Force Survey, we construct a cross-country panel of 22 industries in 8 euro area countries for 1991-2002. Data inspection confirms the existence of a fairly stable inter-industry wage structure that is similar across countries. We then apply panel data techniques to identify factors explaining inter-industry wage differentials in the euro area. Both workforce characteristics (e.g., human capital variables) and firm-related characteristics (e.g., capital intensity, productivity) contribute significantly. However, considerable wage heterogeneity across sectors remains. Idiosyncratic sector and country specifics, reflecting different socio-cultural and institutional backgrounds, appear to bear a major role. While our empirical analysis only uses direct evidence from workforce and firm-related characteristics, we also try to relate the remaining heterogeneity to institutional characteristics, based on related literature.
Subjects:Euro area
inter-industry wage differentials
panel estimation
firm and workforce characteristics
labour market institutions
JEL:J31
J24
J51
Persistent Identifier of the first edition:urn:nbn:de:101:1-20090513115
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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