Market Responses to Interindustry Wage Differentials

George Borjas and Valerie Ramey

No 7799, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper examines the link between interindustry wage differentials and subsequent growth of industry variables such as employment, GDP and labor productivity. We find that industries that paid higher than average wages in 1959 experienced significantly lower employment growth and GDP growth in the subsequent 30 to 40 years, while at the same time experiencing higher-than-average growth in the capital-labor ratio and in labor productivity. We argue that the evidence is best explained by a non-competitive model of the interindustry wage structure, as both firms and the market respond to the wage rigidity implied by the long-run persistence of the interindustry wage structure.

JEL-codes: J3 (search for similar items in EconPapers)
Date: 2000-07
Note: EFG LS
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
http://www.nber.org/papers/w7799.pdf (application/pdf)

Related works:
Working Paper: Market Responses to Interindustry Wage Differentials (2000)
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:nbr:nberwo:7799

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w7799

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().