TY  - RPRT
        AU  - Martins, Pedro S.
        TI  - Rent Sharing Before and After the Wage Bill
        PY  - 2004/Nov/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 1376
        UR  - https://www.iza.org/publications/dp1376
        AB  - 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.
        KW  - rent sharing
KW  - matched employer-employee data
KW  - fixed effects
KW  - instrumental variables
        ER  -