Wages and Seniority When Coworkers Matter: Estimating a Joint Production Economy Using Norwegian Administrative Data

Christopher Ferrall, Kjell G Salvanes and Erik Sørensen

No 4130, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We develop an equilibrium model of wages and estimate it using administrative data from Norway. Coworkers interact through a task­-assignment model, and wages are determined through multi­lateral bargaining over the surplus that accrues to the workforce. Seniority affects wages through workplace output and relative bargaining power. These channels are separately identified by imposing equilibrium restrictions on data observing all workers within workplaces. We find joint production is important. Seniority affects bargaining power but is unproductive. We reinterpret gender and firm­-size effects in wages in light of the rejection of linearly separable production.

Keywords: multilateral bargaining; matched data; productivity; wage distributions; assignment models (search for similar items in EconPapers)
JEL-codes: D2 J24 J3 J7 L25 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2009-04
New Economics Papers: this item is included in nep-bec and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Working Paper: Wages And Seniority When Coworkers Matter: Estimating A Joint Production Economy Using Norwegian Administrative Data (2009)
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