TY  - RPRT
        AU  - Guadalupe, Maria
        TI  - Product Market Competition, Returns to Skill and Wage Inequality
        PY  - 2005/Apr/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 1556
        UR  - https://www.iza.org/publications/dp1556
        AB  - This paper shows that increasing product market competition can have a direct impact on the employment relationship and on wage inequality. I develop a simple model in which an increase in product market competition increases returns to skill through the effect of competition on the sensitivity of profits to cost reductions. I then show empirically that relative wages increase with competition using a large panel of United Kingdom workers with complete work histories. I identify the impact of competition on returns to skill in the panel, using two exogenous measures of competition provided by two quasi-natural experiments. Quantile regressions indicate that increased competition also raised returns to unobserved ability.
        KW  - product market competition
KW  - returns to skill
KW  - wage structure
        ER  -