A cointegration model for search equilibrium wage formation

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A cointegration model for search equilibrium wage formation

Author Info

Lourens Broersma () (University of Groningen)
Frank A. G. den Butter () (Tinbergen Institute and Free University, Amsterdam)
Udo Kock () (International Monetary Fund)

Additional information is available for the following registered author(s):

Frank A.G. Den Butter

Abstract

In flow models of the labor market, wages are determined by negotiations between workers and employers on the surplus value of a realized match. From this perspective, this paper presents an econometric analysis of the influence of labor market flows on wage formation as an alternative to the traditional specification of wage equations in which unemployment represents Phillips-curve or wage-curve effects. The paper estimates a dynamic wage equation for the Netherlands using a cointegration approach. It finds that labor flows, and notably flows from outside the labor market, are important determinants of both short-run and long-run wage setting.

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Publisher Info
Article provided by Universidad del CEMA in its journal Journal of Applied Economics.

Volume (Year): IX (2006)
Issue (Month): (November)
Pages: 235-254
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Handle: RePEc:cem:jaecon:v:9:y:2006:n:2:p:235-254

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Paper
- L. Broersma & Frank A.G. den Butter & Udo Kock, 2003. "A Cointegration Model for Search Equilibrium Wage Formation," Tinbergen Institute Discussion Papers 03-088/3, Tinbergen Institute. [Downloadable!]
- Lourens Broersma & F. A. G. den Butter & Udo Kock, 2004. "A Cointegration Model for Search Equilibrium Wage Formation," IMF Working Papers 04/92, International Monetary Fund. [Downloadable!]

Find related papers by JEL classification:
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

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Other versions:
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Other versions:
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Katarzyna Budnik, 2008. "Search Equilibrium with Migration: the Case of Poland," National Bank of Poland Working Papers 45, National Bank of Poland, Economic Institute. [Downloadable!]

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