Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/92263
Authors: 
Abowd, John M.
Kramarz, Francis
Lengermann, Paul Lengermann
McKinney, Kevin L.
Roux, Sébastien
Year of Publication: 
2012
Citation: 
[Journal:] IZA Journal of Labor Economics [ISSN:] 2193-8997 [Publisher:] Springer [Place:] Heidelberg [Volume:] 1 [Year:] 2012 [Pages:] 1-25
Abstract: 
We reconsider the potential for explaining inter-industry wage differences by decomposing those differences into parts due to individual and employer heterogeneity, respectively. Using longitudinally linked employer-employee data, we estimate the model for the United States and France. The part arising from individual heterogeneity can be theoretically and empirically related to the worker's opportunity wage rate. The part arising from employer heterogeneity can similarly be related to product market quasi-rents and relative bargaining power. We find that these two variables are highly correlated with both parts of the differential in France. Although the U.S. inter-industry wage differentials are strongly correlated with those in France, the decomposition is more nuanced in the American data, where the opportunity wage rate and the product market conditions are related to both the personal and employer heterogeneity.
Subjects: 
Inter-industry wage differentials
Matched employer-employee data
Quasi-rents
JEL: 
J31
J50
L10
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by/2.0/
Document Type: 
Article
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