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Who Benefits from Firm Success? Heterogenous Rent Sharing in New Zealand

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  • Allan, Corey
  • Maré, David C.

    (Motu Economic and Public Policy Research Trust)

Abstract

We examine heterogeneous rent-sharing in New Zealand using LEED data. Using a refined measures of quasi-rents per worker, we find that 20% to 30% of workers are in zero-excess-rent firms - disproportionately women, Māori or Pacific peoples, low-qualified workers, and those in hospitality, admin services, and retail industries,. The overall rent-sharing elasticity of 0.03 is equivalent to $38 higher earnings per $1,000 of excess rents per worker. Sharing varies by qualification, tenure, and ethnicity, but not by firm size or age. In most industries, workers receive $1,500-$2,000 of rents per year. Sharing is highest in auxiliary finance and professional services sectors and lowest in grocery retailing, food and beverage manufacturing and utilities. There is some evidence of insurance-type behaviour by firms. Differences in bargaining power are also likely to affect rent sharing variation.

Suggested Citation

  • Allan, Corey & Maré, David C., 2022. "Who Benefits from Firm Success? Heterogenous Rent Sharing in New Zealand," IZA Discussion Papers 15264, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp15264
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    Cited by:

    1. Richard Fabling & David C Maré & Philip Stevens, 2022. "Migration and firm-level productivity," Working Papers 2022/01, New Zealand Productivity Commission.

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    More about this item

    Keywords

    wage determination; rent-sharing; imperfect competition;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

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