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Rents and Quasi Rents in the Wage Structure: Evidence from Hostile Takeovers
Author(s) -
NEUMARK DAVID,
SHARPE STEVEN A.
Publication year - 1996
Publication title -
industrial relations: a journal of economy and society
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.61
H-Index - 57
eISSN - 1468-232X
pISSN - 0019-8676
DOI - 10.1111/j.1468-232x.1996.tb00400.x
Subject(s) - economic rent , wage , economics , labour economics , shareholder , payment , monetary economics , market economy , finance , corporate governance
We test whether industry‐related variation in wage premium and slopes of wage profiles reflects payments of rents or quasi rents, taking our cue from the wealth‐transfer hypothesis, which argues that hostile takeovers target such rents. If these wage structure characteristics reflect extramarginal payments, then hostile takeover attempts that sought to transfer wealth from workers to shareholders should have targeted firms with the highest wage premia or the steepest wage profiles. We find that the likelihood of being a hostile takeover target between 1979 and 1989 was generally unrelated to these industry‐related characteristics of the wage structure.