Market Responses to Interindustry Wage Differentials

George Borjas () and Valerie Ann Ramey ()

No 7799, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper examines the link between interindustry wage differentials and subsequent growth of industry variables such as employment, GDP and labor productivity. We find that industries that paid higher than average wages in 1959 experienced significantly lower employment growth and GDP growth in the subsequent 30 to 40 years, while at the same time experiencing higher-than-average growth in the capital-labor ratio and in labor productivity. We argue that the evidence is best explained by a non-competitive model of the interindustry wage structure, as both firms and the market respond to the wage rigidity implied by the long-run persistence of the interindustry wage structure.

JEL-codes: J3 (search for similar items in EconPapers)
Date: 2000-07
Note: EFG LS
View list of references View citations in EconPapers

Downloads: (external link)
http://www.nber.org/papers/w7799.pdf (application/pdf)
Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html.

Related works:
Working Paper: Market Responses to Interindustry Wage Differentials (2000)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:nbr:nberwo:7799

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w7799
The price is Paper copy available by mail.

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc
Address: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Contact information at EDIRC.
Series data maintained by ().