TY  - JOUR
AU  - Blanchflower,David G.
AU  - Oswald,Andrew J.
AU  - Sanfey,Peter
TI  - Wages, Profits and Rent-Sharing
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4222
PY  - 1992
Y2  - December 1992
UR  - http://www.nber.org/papers/w4222
L1  - http://www.nber.org/papers/w4222.pdf
N1  - Author contact info:
David G. Blanchflower
Bruce V. Rauner Professor of Economics
6106 Rockefeller Hall
Dartmouth College
Hanover, NH  03755-3514
Tel: 603/646-2536
Fax: 603/646-2122
E-Mail: David.G.Blanchflower@Dartmouth.EDU

Andrew Oswald
Department of Economics
University of Warwick
Coventry CV4 7AL
England
Tel: 44-01203-5235
Fax: 44-01203-5230
E-Mail: a.j.oswald@warwick.ac.uk
AB  - The paper uses CPS data from 1964 to 1985 to test for the existence of rent-sharing in US tabor markets, Using an unbalanced panel from the manufacturing sector, and random-effects and fixed-effects specifications, the paper finds that changes in wages are explained by movements in lagged levels of profitability and unemployment. The results appear to be consistent with rent-sharing theory (or a labor contract framework with risk-averse firms) and to be inconsistent with the competitive labor market model. The paper estimates the unemployment elasticity of pay at approximately -0.03, and the profit elasticity of pay at between 0.02 and 0.05.
ER  -