IZA DP No. 4871: Micro-Evidence on Rent Sharing from Different Perspectives
This article provides evidence of rent sharing from orthogonal directions by exploiting different dimensions in the same data. Taking advantage of a rich matched employer-employee dataset for France over the period 1984-2001, we consistently compare across-industry heterogeneity in rent-sharing parameters derived from three different approaches. The accounting approach and the standard labor economics approach are compatible with distinct labor bargaining settings (right-to-manage, efficient bargaining, labor hoarding) whereas the productivity approach hinges on the assumption of efficient bargaining. Across the different approaches, we evidently find differences in dispersion of the rent-sharing parameter estimates which could be attributable to differences in modeling assumptions and/or data requirements but these estimates lie within a comparable range. We interpret the latter finding as lending empirical support to efficient bargaining as the nature of the bargaining process in France over the considered period.