March 2004

IZA DP No. 1067: Did European Labor Markets Become More Competitive in the 1990s? Evidence from Estimated Worker Rents

published in: Labor Markets and Institutions, Santiago: Central Bank of Chile 2005; 281-300

This paper analyses the evolution of quantitative measures of employee rents in Europe during the nineties, using the European Household Panel Survey. One looks at two class of measures: wage differentials between workers along industry and firm size dimensions, and estimated welfare differences between employed and unemployed using a model of labor market transitions. The results are largely negative; there is robust evidence of falling rents during that period only in Ireland.