Wage differentials across sectors in Europe: an east-west comparison

This study compares the structure and determinants of inter-industry wage differentials in Eastern and Western European countries on the basis of the 2002 European Structure of Earnings Survey. Findings show substantial differences in earnings across sectors in all countries, even when controlling for a wide range of employee, job and employer characteristics. The hierarchy of sectors in terms of wages appears to be quite similar in Eastern and Western European countries. In contrast, the dispersion of inter-industry wage differentials is found to fluctuate considerably across countries and to be strongly correlated with collective bargaining characteristics.