Industry Wage Differentials Rent Sharing and Gender in Belgium

Abstract

The main objective of this paper is to present new empirical elements to the debate on sources of wage differentials in Belgium. We investigate issues specifically related to the role of sectoral affiliation in the wage setting process. Hence, there is the empirical investigation of: i) the interaction between inter-industry wage differentials and the gender wage gap in six European countries, ii) how rent sharing interacts with the gender wage gap in the Belgian private sector and iii) the existence of inter-industry wage differentials in Belgium, through the unobserved ability hypothesis. Findings show that combined industry effects explain around 29% of the gender wage gap in Ireland, respectively 14 and 16% in Denmark and Italy, around 7% in the U.K. and almost no share in Belgium and Spain. Our results also suggest that a substantial part of the gender wage gap is due to women’s segregation in less profitable firms. Finally, our results show that rent-sharing account for a large fraction of industry wage differentials.Classification JEL – J16, J31, J71.