%0 Report
        %A Martins, Pedro S.
        %T Rent Sharing Before and After the Wage Bill
        %D 2004
        %8 2004 Nov
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 1376
        %U https://www.iza.org/index.php/publications/dp1376
        %X Many biases plague the estimation of rent sharing in labour markets. Using a Portuguese
matched employer-employee panel, these biases are addressed in this paper in three
complementary ways: 1) Controlling directly for the fact that firms that share more rents will,
ceteris paribus, have lower net-of-wages profits. 2) Instrumenting profits via interactions
between the exchange rate and the share of exports in firms’ total sales. 3) Considering firm
or firm/worker spell fixed effects and highlighting the role of downward wage rigidity. These
approaches clarify conflicting findings in the literature and result, in our preferred
specification, in a Lester range of pay dispersion of 56%, also shown to be robust to a
number of competitive interpretations.
        %K rent sharing
%K matched employer-employee data
%K fixed effects
%K instrumental variables