Identifying rent-sharing using firms' energy input mix

Matthias Mertens, Steffen Müller and Georg Neuschäffer
Authors registered in the RePEc Author Service: Steffen Mueller

No 19/2022, IWH Discussion Papers from Halle Institute for Economic Research (IWH)

Abstract: We present causal evidence on the rent-sharing elasticity of German manufacturing firms. We develop a new firm-level Bartik instrument for firm rents that combines the firms' predetermined energy input mix with national energy carrier price changes. Reduced-form evidence shows that higher energy prices depress wages. Instrumental variable estimation yields a rent-sharing elasticity of approximately 0.20. Rent-sharing induced by energy price variation is asymmetric and driven by energy price increases, implying that workers do not benefit from energy price reductions but are harmed by price increases. The rent-sharing elasticity is substantially larger in small (0.26) than in large (0.17) firms.

Keywords: Bartik instrument; energy prices; rent-sharing; wage inequality (search for similar items in EconPapers)
JEL-codes: C26 J30 P18 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-bec, nep-ene, nep-eur and nep-lma
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:iwhdps:192022

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