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Insider Power in Wage Determination: Evidence from Brazilian Data
Author(s) -
Carneiro Francisco G.
Publication year - 1999
Publication title -
review of development economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.531
H-Index - 50
eISSN - 1467-9361
pISSN - 1363-6669
DOI - 10.1111/1467-9361.00058
Subject(s) - insider , economics , wage , panel data , labour economics , power (physics) , efficiency wage , bargaining power , wage growth , econometrics , microeconomics , physics , quantum mechanics , political science , law
This paper examines the determinants of industrial real wages in Brazil, making use of panel data on 22 industry sectors with monthly observations for the period 1985–93. The main objective is to test whether industrial wages in Brazil respond to sectoral performance. In line with the evidence for other countries, the overall results suggest that sectoral conditions (insider effects) play an important role in real wage determination in Brazil. This is also indicative that the Brazilian wage‐setting structure is far from conforming to the traditional textbook description of competitive models and appears rather conducive to rent sharing.