Wage and Labor Productivity Dispersion: The Roles of Total Factor Productivity, Labor Quality, Capital Intensity, and Rent Sharing. / Bagger, Jesper; Christensen, Bent Jesper; Mortensen, Dale .

2012.

Research output: Working paper

In preparation

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@techreport{9fd018eb594a44afafc39dfb9de997ae,
title = "Wage and Labor Productivity Dispersion: The Roles of Total Factor Productivity, Labor Quality, Capital Intensity, and Rent Sharing",
abstract = "Considerable heterogeneity has been documented for both firm laborproductivity and average wages paid by firms within developed industrialcountries and the two are positively correlated across firms. Theseobservations can be rationalized by either exogenous heterogeneity in firmproductivity and a wage setting mechanism with rent sharing or bydifferences in capital intensity and in the quality of labor inputs. Thepurpose of this paper is to ascertain the extent to which these factorsprovide an explanation of the observations using matched employer-employeedata for Denmark. Using the worker fixed effect in a wage equation as ameasure of worker quality, we find that capital intensity and labor inputquality differences explain little of the observed labor productivityheterogeneity in manufacturing but are the principal explanation fordifferences in firm wages paid. However, both labor quality differences andrent sharing are important in explaining the positive correlation betweenaverage firm wage and labor productivity. Somewhat more mixed results holdfor the other four industry groups considered.",
author = "Jesper Bagger and Christensen, {Bent Jesper} and Dale Mortensen",
year = "2012",
language = "English",
type = "WorkingPaper",

}

RIS

TY - UNPB

T1 - Wage and Labor Productivity Dispersion: The Roles of Total Factor Productivity, Labor Quality, Capital Intensity, and Rent Sharing

AU - Bagger, Jesper

AU - Christensen, Bent Jesper

AU - Mortensen, Dale

PY - 2012

Y1 - 2012

N2 - Considerable heterogeneity has been documented for both firm laborproductivity and average wages paid by firms within developed industrialcountries and the two are positively correlated across firms. Theseobservations can be rationalized by either exogenous heterogeneity in firmproductivity and a wage setting mechanism with rent sharing or bydifferences in capital intensity and in the quality of labor inputs. Thepurpose of this paper is to ascertain the extent to which these factorsprovide an explanation of the observations using matched employer-employeedata for Denmark. Using the worker fixed effect in a wage equation as ameasure of worker quality, we find that capital intensity and labor inputquality differences explain little of the observed labor productivityheterogeneity in manufacturing but are the principal explanation fordifferences in firm wages paid. However, both labor quality differences andrent sharing are important in explaining the positive correlation betweenaverage firm wage and labor productivity. Somewhat more mixed results holdfor the other four industry groups considered.

AB - Considerable heterogeneity has been documented for both firm laborproductivity and average wages paid by firms within developed industrialcountries and the two are positively correlated across firms. Theseobservations can be rationalized by either exogenous heterogeneity in firmproductivity and a wage setting mechanism with rent sharing or bydifferences in capital intensity and in the quality of labor inputs. Thepurpose of this paper is to ascertain the extent to which these factorsprovide an explanation of the observations using matched employer-employeedata for Denmark. Using the worker fixed effect in a wage equation as ameasure of worker quality, we find that capital intensity and labor inputquality differences explain little of the observed labor productivityheterogeneity in manufacturing but are the principal explanation fordifferences in firm wages paid. However, both labor quality differences andrent sharing are important in explaining the positive correlation betweenaverage firm wage and labor productivity. Somewhat more mixed results holdfor the other four industry groups considered.

M3 - Working paper

BT - Wage and Labor Productivity Dispersion: The Roles of Total Factor Productivity, Labor Quality, Capital Intensity, and Rent Sharing

ER -