WAGES, PROFITS, AND RENT-SHARING

The paper suggests a new test for rent-sharing in the U. S. labor mark et. Using an unbalanced panel from the manufacturing sector it shows t hat a rise in a sector's profitability leads after some years to an in crease in the long-run level of wages in that sector. The paper contro ls for workers' characteristics, for industry fixed effects, and for u nionism. Lester's range of wages is estimated, for rent-sharing reason s alone, at approximately 24 percent of the mean wage.