To Have and to Hold: Trends in Industry Rents for Germany

The fundamental aims of the project are to provide empirical estimates of changing industry rents in Germany since the 1970s, to contribute evidence on demand-side, technological and corporate governance sources of (changes in) rent acquisition, and to situate observed trends relative to the international evidence. As the German wage distribution has seen a rise in top earnings since the mid-1990s, the project will pay particular attention to the role of soaring rents in management positions in the service sector, especially in financial services.

The work is being continued in the project “Organizational Structure, Technological Change and Rising Wage Inequality in Germany: an Empirical Study Using Linked Employer-Employee Data”, funded for the period 1/2015-12/2017 by the German Science Foundation as part of its Priority Program “The German Labor Market in a Globalized World: Challenges through Trade, Technology, and Demographics” (SPP 1764). The first paper “Task-specific industry rents in Germany, 1973-2010” is eventually abandoned due to inadequate quality of income data in the Mikrozensus. For the second project paper on “Rents, sorting and matching: a decomposition of changes in the German wage distribution using panel data”, a first version of the statistical analysis has been completed. A write-up of the full manuscript is projected for spring 2015. There is a delay relative to original plan because of a switch in publication strategy; while the initial planning was to aim for 2-3 papers in medium-quality outlets, the quality of empirical results seems of sufficient interest to justify aiming for a top-level publication, aiming at least at submission to the European Sociological Review (ranked 11/138 in Soc). The third paper “Changing industry rents in the financial sector: technology, work organization or wage setting institutions?” is expanded in coverage, using linked employer-employee data work now continued under DFG funding