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Influence of the Sectoral Composition of Production on Occupational and Sectoral Wage Structures

Author

Listed:
  • Marconi, Nelson
  • Sartorello Spinola, Danilo
  • Porto, Tiago
  • Araújo, Eliane

Abstract

This paper explores the impact of the sectoral composition of production on the evolution of occupational structures and relative wage differentials. We employ a shift-share analysis over three periods to highlight the relevance of sectoral employment in explaining shifts in the occupational employment structure. We introduce the Weighted Occupational Unemployment by Sector (WOUS), to capture the influence of sectoral demand by occupation and the influence of labor supply on relative wage differentials. We also leverage the sectoral share on total value added (VA) as a proxy for the direct impact of sectoral production composition on relative wages. Finally, we explore the determinants of sectoral wage differentials through an econometric panel regression analysis. Our results suggest that the sectoral composition of output influences the labor demand for distinct skills, affecting the occupational composition of employment and, thus, relative wages.

Suggested Citation

  • Marconi, Nelson & Sartorello Spinola, Danilo & Porto, Tiago & Araújo, Eliane, 2024. "Influence of the Sectoral Composition of Production on Occupational and Sectoral Wage Structures," MERIT Working Papers 2024-023, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2024023
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    More about this item

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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