rent-sharing

Year of Publication
1990
Abstract

This paper estimates the role of insider power in wage determination in a
unionized industry, examining the direction and magnitude of biases which may
arise through failure to control for variation in both hours of work and the
composition of the labor force and through failure to control for the endogeneity
of measured profits. Furthermore, by examining the extent to which rent-sharing
is related to exogenous demand shocks rather than to potentially endogenous
productivity, we provide a test of the bargaining and ‘pure’ efficiency wage
models, finding that the majority of the insider weighting can be explained by
the bargaining model. Our data set covers earnings and profitability in the New
South Wales coal industry from 1952 to 1987. We estimate a partial adjustment
model and test for co-integration of the time series in order to establish
whether or not a long-run stable equilibrium exists.

Number
277
Date Published
11/1990
Publication Language
eng
Citation Key
Review of Economics and Statistics, Vol. 76, No. 2, May 1994
Mumford, K., & Dowrick, S. (1990). Wage Bargaining with Endogenous Profits, Overtime Working and Heterogeneous Labor. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01gt54kn03v (Original work published 11/1990AD)
Working Papers