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Reflections on the Inter-Industry Wage Structure

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  • Alan B. Krueger
  • Lawrence H. Summers

Abstract

This paper reviews available evidence on the inter-industry wage structure. The inter-industry wage structure is remarkably similar in different eras, in different countries, and among different types of workers. Industries with high capital-to-labor ratios, monopoly power and high profits pay relatively high wages. We conclude that the competitive model cannot without substantial modification provide an adequate explanation of the inter-industry wage structure. The implications of this finding for micro and macro economic theory and policy are examined.

Suggested Citation

  • Alan B. Krueger & Lawrence H. Summers, 1986. "Reflections on the Inter-Industry Wage Structure," NBER Working Papers 1968, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:1968
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    References listed on IDEAS

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    2. George A. Akerlof & Janet L. Yellen, 1985. "A Near-Rational Model of the Business Cycle, with Wage and Price Inertia," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 100(Supplemen), pages 823-838.
    3. Lawrence F. Katz, 1986. "Efficiency Wage Theories: A Partial Evaluation," NBER Chapters, in: NBER Macroeconomics Annual 1986, Volume 1, pages 235-290, National Bureau of Economic Research, Inc.
    4. Joseph W. Garbarino, 1950. "A Theory of Interindustry Wage Structure Variation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 64(2), pages 282-305.
    5. Wachter, Michael L, 1970. "Cyclical Variation in the Interindustry Wage Structure," American Economic Review, American Economic Association, vol. 60(1), pages 75-84, March.
    6. William T. Dickens & Lawrence F. Katz, 1986. "Interindustry Wage Differences and Industry Characteristics," NBER Working Papers 2014, National Bureau of Economic Research, Inc.
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