Full text: Wirtschaft und Gesellschaft - 2016 Heft 4 (4)

42. Jahrgang (2016), Heft 4

Wirtschaft und Gesellschaft

tion paid by employers to employees, is a better measure of primary market distribution since it excludes secondary distribution.

5.3 Country-level variables
With regard to the control variables, union density has a positive effect
on the wage share in specification (3) – indeed it is highly significant and
renders the effect of intermediate import penetration insignificant. The effect of union density is however not robust at the 1-digit level in specification (6).57 The result is confirmed for sub-pools of manufacturing industries. However, given that the variable is measured at the country level, the
reliability of the estimation results by sub-pools is questionable. In order to
obtain at least indicative results with union density measured at the sectoral level we performed robustness tests with union density measured at
the sector level regardless of our concerns about its reliability as mentioned in section 3. In general results for sectoral union density confirm the
results for country-level union density. The positive but not robust impact
of union density is generally driven by all sector and skill groups. Furthermore, we experimented with adjusted bargaining as an alternative measure for workers bargaining power. However, given that bargaining coverage stayed at a constant level since the 1970s in Austria the variable
created multicollinearity with our fixed effects and we had to drop it.
Social government spending turns out to be insignificant or positive for
almost all specifications with the exception of estimations for the high
skilled manufacturing sectors only where we find an unexpected negative
sign for specifications (7) and (8). Nevertheless, like union density, social
government spending becomes insignificant for most estimations in first
differences, while it is positive for service sectors.
Since there are no measures of financialisation at the sectoral level we
can only use country-level variables among which household debt and financial payments appear to have a robust negative effect, albeit mostly for
estimations in first differences. This finding is robust to the application of
different samples, although the highest statistical significance is achieved
for the high-skilled manufacturing sector. Similarly we find a negative effect of household debt for the manufacturing sector for the estimations in
levels, in both low and high skilled manufacturing sectors alike. Given that
lower income workers might be credit constrained and that the recent
surge in household debt was mainly driven by the upper-middle class this
result seems plausible. It is not entirely clear, however, why workers in the
high-skilled manufacturing sector should be stronger affected by household debt than workers in the high skilled service sector.
Our specification (8) reflects the argument that personal income inequality is an indicator of the command over resources and power relations,

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