DP4327 Did European Labour Markets Become More Competitive in the 1990's? Evidence from Estimated Worker Rents

Author(s): Gilles Saint-Paul

Publication Date: March 2004

Keyword(s): unemployment , insiders , rents , labour market flexibility

JEL(s): D30 , E24 , J30

Programme Areas: International Macroeconomics , Labour Economics

Link to this Page: www.cepr.org/pubs/dps/DP4327.asp

This Paper analyses the evolution of quantitative measures of employee rents in Europe during the nineties, using the European Household Panel Survey. I look at two classes of measures: wage differentials between workers along industry and firm size dimensions; and estimated welfare differences between employed and unemployed using a model of labour market transitions. The results are largely negative; there is robust evidence of falling rents during that period only in Ireland.