Understanding inter-industry wage structures in the euro area

Veronique Genre, Karsten Kohn and Daphne Momferatou ()

Applied Economics, 2011, vol. 43, issue 11, 1299-1313

Abstract: This article focuses on the euro area wage structure and its potential determinants from a sectoral viewpoint. Merging information from the Organization for Economic Co-operation and Development (OECD) Structural Analysis database with data from the EU Labour Force Survey, we construct a cross-country panel of 22 industries in eight 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 socio-cultural and institutional backgrounds, appear to bear a major role. While our empirical analysis only uses direct evidence from workforce and firm-related characteristics, we also relate the remaining heterogeneity to institutional characteristics, based on related literature.

Date: 2011
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Citations: View citations in EconPapers (11)

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Related works:
Working Paper: Understanding inter-industry wage structures in the euro area (2009)
Working Paper: Understanding Inter-Industry Wage Structures in the Euro Area (2009)
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DOI: 10.1080/00036846.2010.537637

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