Do Operating Profits Induce a Wage Premium Equally Shared among Employees Earning High or Low Incomes?

Jarle Aarstad and Olav A. Kvitastein
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Jarle Aarstad: Mohn Centre for Innovation and Regional Development, Western Norway University of Applied Sciences, P.O. Box 7030, NO-5020 Bergen, Norway
Olav A. Kvitastein: Mohn Centre for Innovation and Regional Development, Western Norway University of Applied Sciences, P.O. Box 7030, NO-5020 Bergen, Norway

Economies, 2021, vol. 9, issue 2, 1-7

Abstract: Panel data show that between 2001 and 2014 Norwegian industries’ increasing aggregated operating profits per employee increased average wages and wage inequality. The data imply that increasing profits, perhaps unsurprisingly, induce a wage premium. The data further imply that employees earning high incomes at the outset had the highest wage increase percentage-wise. Decreasing operating profits per employee had opposite but less robust effects on average wages and wage inequality. Panel data Granger causality tests finally showed that average wages, but not wage inequality, reversely and positively affect operating profits per employee.

Keywords: operating profits; Gini-coefficients; average wages; wage inequality; performance; productivity; causality (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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