Comparing micro-evidence on rent sharing from two different econometric models

Sabien Dobbelaere*, Jacques Mairesse

*Corresponding author for this work

Research output: Contribution to JournalArticleAcademicpeer-review

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The extent to which employers share rents with their employees is typically assessed by estimating the responsiveness of workers’ wages on firms’ ability to pay. This paper compares rent-sharing estimates using such a wage determination regression with estimates based on a productivity regression that relies on standard firm-level input and output data. Using a large matched firm-worker panel data sample for French manufacturing, we find that the respective industry distributions of the rent-sharing estimates are correlated and slightly overlap, but are significantly different on average. Precisely, if we only rely on the firm-level information, we obtain an average rent-sharing estimate of roughly 0.30 for the productivity regression and 0.17 for the wage determination regression. When we also take advantage of the worker-level information to control for unobserved worker ability in the model of wage determination, we find as expected a lower average value of 0.10.

Original languageEnglish
Pages (from-to)18-26
Number of pages9
JournalLabour Economics
Early online date2 Mar 2018
Publication statusPublished - Jun 2018


  • Matched employer-employee data
  • Production function
  • Rent sharing
  • Wage equation


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