Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/153456
Authors: 
Genre, Véronique
Kohn, Karsten
Momferatou, Daphne
Year of Publication: 
2009
Series/Report no.: 
ECB Working Paper 1022
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 sociocultural and institutional backgrounds, appear to bear a major role. While our paper only uses direct evidence from workforce and firm-related characteristics, we also try to relate the remaining heterogeneity to institutional characteristics, based on available relevant literature.
Subjects: 
euro area
firm and workforce characteristics
inter-industry wage differentials
Labour market institutions
panel estimation
JEL: 
J31
J24
J51
Document Type: 
Working Paper

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