Understanding inter-industry wage structures in the euro area

Veronique Genre, Daphne Momferatou () and Karsten Kohn

No 1022, Working Paper Series from European Central Bank

Abstract: This paper focuses on the euro area wage structure and its potential determinants from a sectoral viewpoint. Merging information from the OECD Structural Analysis database with data from the EU Labour Force Survey, we construct a cross-country panel of 22 industries in 8 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 sociocultural and institutional backgrounds, appear to bear a major role. While our paper only uses direct evidence from workforce and firm-related characteristics, we also try to relate the remaining heterogeneity to institutional characteristics, based on available relevant literature. JEL Classification: J31, J24, J51

Keywords: euro area; firm and workforce characteristics; inter-industry wage differentials; Labour Market Institutions; panel estimation (search for similar items in EconPapers)
Date: 2009-03
New Economics Papers: this item is included in nep-eec and nep-lab
Note: 471525
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Related works:
Working Paper: Understanding Inter-Industry Wage Structures in the Euro Area (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20091022

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