• Media type: Report; E-Book
  • Title: Understanding inter-industry wage structures in the euro area
  • Contributor: Genre, Véronique [Author]; Kohn, Karsten [Author]; Momferatou, Daphne [Author]
  • Published: Frankfurt a. M.: European Central Bank (ECB), 2009
  • Language: English
  • Keywords: Sektorale Lohnstruktur ; Humankapital ; Produktivität ; J51 ; inter-industry wage differentials ; Arbeitsmarktflexibilität ; firm and workforce characteristics ; EU-Staaten ; J31 ; Kapitalintensität ; Eurozone ; J24 ; Labour market institutions ; euro area ; panel estimation
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  • Description: 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.
  • Access State: Open Access