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Envy, Fairness and Political Influence in Local Government Wage Determination: Evidence from Norway

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  • Strom, Bjarne
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    Abstract

    The main question in this paper is: Do wages of low-skilled workers in Norwegian local governments adjust to clear the labor market for such workers, or are the wages affected by trade unions comparing their wages with other wages inside the local governments? The main empirical findings are as follows. First, wages of low-skilled local government employees respond not to wages in the external labor market, but to wages of higher skilled and higher paid workers inside the local government. Second, wages are positively associated with the share of socialist politicians in the local council. These results are interpreted as support for a union model with internal pay comparisons in Norwegian local governments. Copyright 1995 by The London School of Economics and Political Science.

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    Bibliographic Info

    Article provided by London School of Economics and Political Science in its journal Economica.

    Volume (Year): 62 (1995)
    Issue (Month): 247 (August)
    Pages: 389-409

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    Handle: RePEc:bla:econom:v:62:y:1995:i:247:p:389-409

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    Cited by:
    1. Torberg Falch & Bjarne Strøm, 2005. "Wage Bargaining and Political Strength in the Public Sector," CESifo Working Paper Series 1629, CESifo Group Munich.
    2. John Burger & Stephen Walters, 2008. "Testing Fair Wage Theory," Journal of Labor Research, Springer, vol. 29(4), pages 318-332, December.
      • John D. Burger & Stephen J.K. Walters, 2006. "Testing Fair Wage Theory," Working Papers 0623, International Association of Sports Economists;North American Association of Sports Economists.
    3. Gaetano D’Adamo & Mariam Camarero & Cecilio Tamarit, 2013. "Wage leadership models: a country-by-country analysis of the EMU," Working Papers 1317, Department of Applied Economics II, Universidad de Valencia.
    4. Fafchamps, Marcel & Shilpi, Forhad, 2006. "Subjective Welfare, Isolation and Relative Consumption," CEPR Discussion Papers 6002, C.E.P.R. Discussion Papers.
    5. Lars-Erik Borge & Torberg Falch & Per Tovmo, 2008. "Public sector efficiency: the roles of political and budgetary institutions, fiscal capacity, and democratic participation," Public Choice, Springer, vol. 136(3), pages 475-495, September.
    6. Gregory, Robert G. & Borland, Jeff, 1999. "Recent developments in public sector labor markets," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 53, pages 3573-3630 Elsevier.
    7. Revelli Federico & Tovmo Per, 2006. "Declared vs. revealed yardstick competition:Local government efficiency in Norway," Department of Economics and Statistics Cognetti de Martiis. Working Papers 200605, University of Turin.
    8. D'Adamo, Gaetano, 2011. "Wage spillovers across sectors in Eastern Europe," MPRA Paper 27841, University Library of Munich, Germany.

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