Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/24699
Authors: 
Gürtzgen, Nicole
Year of Publication: 
2006
Series/Report no.: 
ZEW Discussion Papers 05-90 [rev.]
Abstract: 
Using a linked employer-employee data set, this paper analyses the relationship between firm profitability and wages. Particular emphasis is given to the question of whether the sensitivity of wages to firm-specific rents varies with collective bargaining coverage. To address this issue, we distinguish sector-specific wage agreements, firm-specific wage agreements and wage determination without any bargaining coverage. Our findings indicate that individual wages are positively related to firm-specific quasi-rents in the non-union sector and under firm-specific contracts. Industry-wide wage contracts, however, seem to suppress firm-level rent-sharing. While pooled OLS estimates yield a positive correlation between wages and quasirents under centralised contracts, estimates accounting for unobserved individual and establishment heterogeneity point to a coefficient of zero. Finally, GMM estimates using suitable lagged values as instruments indicate that this result appears to be robust to the endogeneity of quasi-rents.
Subjects: 
Rent-Sharing
Unions
Linked Employer-Employee Data
JEL: 
C23
J31
J51
Document Type: 
Working Paper

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