Inter-industry wage differentials in Ireland

Brenda Gannon, Brian Nolan

    Research output: Contribution to journalArticlepeer-review

    Abstract

    This paper investigates inter-industry wage differentials in Ireland, taking advantage of access to a dataset that is uniquely suitable for this purpose, the 1996 Structure of Earnings Survey. This allows us to measure not simply overall differentials in the average wage across sectors, but also the extent to which these are associated with a range of employee, job, employer and sectoral characteristics. The results show that there are substantial differences in earnings across industrial sectors in Ireland, predominantly but not only reflecting differences in measured human capital of workers and attributes of their jobs. While unobserved individual and job characteristics may underpin the remaining differentials, efficiency wage or rent-sharing could also be playing a role. Including a range of firm and sectoral characteristics relevant to the latter does not markedly alter the scale of inter-industry differentials, but firm fixed effects seem important. The dispersion of wages across industries, controlling for observed employee, job and employer characteristics, is quite high in Ireland compared to other industrialised countries.
    Original languageEnglish
    Pages (from-to)157-182
    Number of pages25
    JournalEconomic and Social Review
    Volume35
    Issue number2
    Publication statusPublished - Jun 2004

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