Evidence from micro data

This article presents estimates for inter-industry wage differentials in the Netherlands for the period 1979- 1997. The results indicate that inter-industry wage dif- ferentials in the Netherlands have been very stable over time. Part of the variance in the differentials can be explained by differences in composition of the labour force, another part from job/firm characteristics. The standard deviation of the remaining differentials is still 5 to 6%. Linking the results from the micro data to sec- toral data on profits, we find that rent-sharing can explain a small part of the remaining variance in wage differentials.