Wages And Seniority When Coworkers Matter: Estimating A Joint Production Economy Using Norwegian Administrative Data

QED Working Paper Number
1200

We develop an equilibrium model of wages and estimate it using administrative data from Norway. Coworkers interact through a task-assignment model, and wages are determined through multi-lateral bargaining over the surplus that accrues to the workforce. Seniority affects wages through workplace output and relative bargaining power. These channels are separately identified by imposing equilibrium restrictions on data observing all workers within workplaces. We find joint production is important. Seniority affects bargaining power but is unproductive. We reinterpret gender and firm-size effects in wages in light of the rejection of linearly separable production.

Author(s)

Kjell G. Salvanes
Erik S

JEL Codes

Keywords

Wage Distributions
Productivity
Matched Data
Multilateral Bargaining
Assignment Models

Working Paper

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