Unclassified ECO / WKP ( 2002 ) 4

Using new crosscountry data on industry-specific product market regulations, this paper investigates the relationship between wage premia and some of the policy determinants of product market rents. Hourly wage premia in 2-digit manufacturing and non-manufacturing industries are estimated from detailed data on wage earnings in (or around) 1996 by category of worker (age, sex, education and type of contract) in 12 European and North-American countries. The effects of regulation on these wage premia are estimated by panel data regression techniques. We find that product market regulation restricting competition has a significant positive impact on wage premia in both manufacturing and non-manufacturing industries. However, in the latter industries, this effect is offset by a negative effect of legal public monopolies on wage premia. Since public ownership per se shows no relation to premia, we interpret this result as evidence of either a low-productivity trap due to x-inefficiency in heavily regulated industries or the existence of rent-sharing in the form of non-pecuniary rents, such as job stability and/or low worker effort in public monopolies. Our data is unable to discriminate among these two possibilities. en soi ne montre aucune relation avec les primes, ce résultat peut signaler soit une " trappe " de basse productivité, due à la présence d'inefficacité X dans les industries très fortement régulées, soit une forme de partage non-pécuniaire des rentes, tel qu'une stabilité accrue du poste de travail et/ou un moindre effort de travail dans les monopoles publics. Nos données ne permettent pas de discriminer entre ces deux hypothèses alternatives.