Inter-industry wage differentials : international evidence from micro data

Abstract

Several empirical studies of the inter-industry wage structure tend to show results which do not seem consistent with the competitive model of the labour market. Pieces of casual evidence like the one just quoted are confirmed by a number of more detailed investigations. These suggest that some industries might pay higher wages than others, even when differences in (observable) labour quality are taken into proper account. In other words, equal employees may not be paid equal wages across industries. Inter-industry wage differentials also seem a very stable phenomenon over time, across countries and across occupations. According to existing work, today’s high- and low-wage industries tend to be the same as those at the beginning of this century and, moreover, have remained in these relative positions during the whole intervening period; high- and low-wage industries appear to be the same in several countries, especially developed capitalist economies; and, wage differentials seem to be stable with respect to different occupations within the same industry.