Matteo Targa (University of Roma Tre)
Marta Fana and Luca Giangregorio
We examine how firm-level productivity shocks transmit to wages across the occupational hierarchy, using matched employer-employee administrative data from Portugal linked to firm balance sheets (2004--2019). Exploiting a data-driven algorithm that identifies firms experiencing permanent increases in value added, we estimate occupation-specific rent-sharing elasticities through an event-study design. The results reveal substantial within-firm heterogeneity in rent sharing that follows a clear hierarchy: board members exhibit the largest pay responses, followed by managers and supervisors, then mid-qualified workers. Low-qualified workers experience minimal wage gains. We further document a secular decline in rent-sharing concentrated among low-qualified workers, widening within-firm inequality over time. We provide evidence that the erosion of collective bargaining power is a primary driver of this trend: low-qualified workers in high-union-density firms capture significant wage gains following a productivity shock, while those in low-union-density firms capture none. Statutory minimum wage increases do not crowd out rent-sharing.