Institutions and Wage Determination: a Multi-country Approach
AbstractWe present an empirical analysis of the determinants of labour cost in OECD countries, with particular reference to the impact of labour market institutions from 1960 to 1994. We show that labour market regulations can explain a large part of the labour cost rise in OECD countries in the last few decades once we control for productivity. These results are consistent with the findings of a companion paper [Nickell, Nunziata and Ochel (2005) "Economic Journal", Vol. 115, pp. 1-27] where the effects of institutions on unemployment are examined. We present also a discussion of the econometric issues related to the estimation of a macro pooled model like ours. We focus, among other things, on the hypothesis of poolability and on the cointegration properties of the model. The explanatory power of the model is finally tested by means of a series of country by country dynamic simulations. Copyright 2005 Blackwell Publishing Ltd.
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Bibliographic InfoArticle provided by Department of Economics, University of Oxford in its journal Oxford Bulletin of Economics & Statistics.
Volume (Year): 67 (2005)
Issue (Month): 4 (08)
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Other versions of this item:
- L. Nunziata, 2002. "Institutions and Wage Determination: A Multi-Country Approach," Working Papers 433, Dipartimento Scienze Economiche, Universita' di Bologna.
- Luca Nunziata, 2001. "Institutions and Wage Determination: a Multi-Country Approach," Economics Papers 2001-W29, Economics Group, Nuffield College, University of Oxford.
- E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
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