Product market regulation and wage premia in Europe and North America: An empirical investigation

Sebastien Jean and Giuseppe Nicoletti

International Economics, 2015, issue 144, 1-28

Abstract: The paper explores the link between wage premia and the determinants of product market rents. We first estimate 2-digit industry premia from 1996 wage earnings data by category of worker (age, sex, education and type of contract) in 10 European countries, the US and Canada. Using industry-specific regulation data, we then look at the effects of restrictions to competition and public ownership on wage premia in non-manufacturing industries, where regulatory conditions vary the most and are better documented. We find that, given workers? bargaining power, anticompetitive regulations significantly increase wage premia, reflecting the presence of rents. However, premia decline in industries dominated by legal public monopolies, suggesting a hump-shaped relationship between regulation and premia. We show that the hump-shape is consistent with a model of non-pecuniary rent-sharing between workers and a populist public monopolist.

Keywords: Regulation; Competition; Wage premia; Rent-sharing; Panel data (search for similar items in EconPapers)
JEL-codes: C23 J31 L51 (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S211070171500027X (text/html)

Related works:
Working Paper: Product market regulation and wage premia in Europe and North America: an empirical investigation (2015)
Working Paper: Product Market Regulation and Wage Premia in Europe and North America: An Empirical Investigation (2002)
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: https://EconPapers.repec.org/RePEc:cii:cepiie:2015-q4-144-1

Access Statistics for this article

More articles in International Economics from CEPII research center Contact information at EDIRC.
Bibliographic data for series maintained by ().