ON WAGE FORMATION, WAGE DEVELOPMENT AND FLEXIBILITY: A comparison between European countries and the United States
AbstractWe derive a non-linear wage equation from a wage bargaining model and estimate an error correction model for Germany, Spain, France, the Netherlands and the US. Based on the estimated parameters, we derive time-varying elasticities of wages with respect to its determinants labour productivity, prices, taxes, unemployment and the replacement rate. Moreover, we quantify the contribution of each determinant to the wage increase. The dominant role of prices in the wage formation in the seventies and eighties was taken over by labour productivity for the US and unemployment in Spain and the Netherlands at the end of the nineties.
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Bibliographic InfoArticle provided by Euro-American Association of Economic Development in its journal Applied Econometrics and International Development.
Volume (Year): 8 (2008)
Issue (Month): 1 ()
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Other versions of this item:
- Marga Peeters & Ard den Reijer, 2003. "On Wage Formation, Wage Development and Flexibility: A comparison between European countries and the United States," DNB Staff Reports (discontinued) 108, Netherlands Central Bank.
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models &bull Diffusion Processes
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
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