Risk Sharing in Labour Markets.
Empirical work in labour economics has focused on rent sharing as an explanation for the observed correlation in cross-sections between wages and profitability. The alternative explanation of risk sharing between workers and employers has not been tested. Using a unique panel data set for four Afric...
| Main Authors: | , , , , , , , , , , , |
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| Format: | Working paper |
| Language: | English |
| Published: |
Tinbergen Institute
2003
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| _version_ | 1797105695817990144 |
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| author | Bigsten, A Collier, P Dercon, S Fafchamps, M Gauthier, B Gunning, J Oduro, A Oostendorp, R Pattillo, C Söderbom, M Teal, F Zeufack, A |
| author_facet | Bigsten, A Collier, P Dercon, S Fafchamps, M Gauthier, B Gunning, J Oduro, A Oostendorp, R Pattillo, C Söderbom, M Teal, F Zeufack, A |
| author_sort | Bigsten, A |
| collection | OXFORD |
| description | Empirical work in labour economics has focused on rent sharing as an explanation for the observed correlation in cross-sections between wages and profitability. The alternative explanation of risk sharing between workers and employers has not been tested. Using a unique panel data set for four African countries we find strong evidence of risk sharing. Workers in effect offer insurance to employers: when firms are hit by temporary shocks the effect on profits is cushioned by risk sharing with workers. Rent sharing is a symptom of an inefficient labor market. Risk sharing, however, can be seen as an efficient response to missing markets. Our evidence suggests that risk sharing accounts for a substantial part of the observed effect of shocks on wages. |
| first_indexed | 2024-03-07T06:51:01Z |
| format | Working paper |
| id | oxford-uuid:fc8e7755-0936-4d87-82d6-a0ea2d459bdf |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-03-07T06:51:01Z |
| publishDate | 2003 |
| publisher | Tinbergen Institute |
| record_format | dspace |
| spelling | oxford-uuid:fc8e7755-0936-4d87-82d6-a0ea2d459bdf2022-03-27T13:21:54ZRisk Sharing in Labour Markets.Working paperhttp://purl.org/coar/resource_type/c_8042uuid:fc8e7755-0936-4d87-82d6-a0ea2d459bdfEnglishDepartment of Economics - ePrintsTinbergen Institute2003Bigsten, ACollier, PDercon, SFafchamps, MGauthier, BGunning, JOduro, AOostendorp, RPattillo, CSöderbom, MTeal, FZeufack, AEmpirical work in labour economics has focused on rent sharing as an explanation for the observed correlation in cross-sections between wages and profitability. The alternative explanation of risk sharing between workers and employers has not been tested. Using a unique panel data set for four African countries we find strong evidence of risk sharing. Workers in effect offer insurance to employers: when firms are hit by temporary shocks the effect on profits is cushioned by risk sharing with workers. Rent sharing is a symptom of an inefficient labor market. Risk sharing, however, can be seen as an efficient response to missing markets. Our evidence suggests that risk sharing accounts for a substantial part of the observed effect of shocks on wages. |
| spellingShingle | Bigsten, A Collier, P Dercon, S Fafchamps, M Gauthier, B Gunning, J Oduro, A Oostendorp, R Pattillo, C Söderbom, M Teal, F Zeufack, A Risk Sharing in Labour Markets. |
| title | Risk Sharing in Labour Markets. |
| title_full | Risk Sharing in Labour Markets. |
| title_fullStr | Risk Sharing in Labour Markets. |
| title_full_unstemmed | Risk Sharing in Labour Markets. |
| title_short | Risk Sharing in Labour Markets. |
| title_sort | risk sharing in labour markets |
| work_keys_str_mv | AT bigstena risksharinginlabourmarkets AT collierp risksharinginlabourmarkets AT dercons risksharinginlabourmarkets AT fafchampsm risksharinginlabourmarkets AT gauthierb risksharinginlabourmarkets AT gunningj risksharinginlabourmarkets AT oduroa risksharinginlabourmarkets AT oostendorpr risksharinginlabourmarkets AT pattilloc risksharinginlabourmarkets AT soderbomm risksharinginlabourmarkets AT tealf risksharinginlabourmarkets AT zeufacka risksharinginlabourmarkets |