Inter-industry wage differentials. Evidence from developed and developing countries

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Ulyana, K. (2012) Inter-industry wage differentials. Evidence from developed and developing countries.A thesis submitted in partial fulfillment of the requirements for the degree of MA in Economics. Kyiv: Kyiv School of Economics (EN)



This paper investigates the impact of industry effect on wage setting for the same occupational groups divided by wage hierarchy: top-management, middle-class workers and low-wage workers. Data used in this research are taken from WageIndicator dataset for 2010. These data were collected through a web portal connecting to national websites in almost 50 countries. Method of ordinary least squares (OLS) is used in obtaining the results of the wage equations. Results are compared using different set of controls: human capital characteristics and enterprise conditions. Findings from cross-country equations indicate that inter-industry wage differentials are persistent for same set of industries, for employees in the same occupational group controlling for labour characteristics, firm’s characteristic and notwithstanding the developed and developing countries. However Manufacturing industry seems to be the lowest paid industry in developing economies, this pattern breaks for advanced economies countries.