Persistence of Interindustry Wage Differentials: A Reexamination Using Matched Worker-Firm Panel Data.

The authors estimate interindustry wage differentials using new French longitudinal data that allow a tracking of workers and their firms over time. They find that, when measured on a cross-sectional basis, they primarily reflect the interindustry variations in unmeasured labor quality. However, interindustry wage differentials are only a minor component of interfirm wage differentials. The average differential in wages paid to the same workers by different firms is about 20-30 percent. In a given industry, wage policies are more favorable to workers in large, capital-intensive firms. Copyright 1999 by University of Chicago Press.