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Wage Bargaining and the (Dynamic) Mincer Equation

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  • Corrado Andini

    ()
    (University of Madeira, CEEAplA and IZA)

Abstract

This paper shows that, if observed earnings are the result of employer-employee wage bargaining, under a set of specific assumptions, the standard static Mincer equation can be thought as a particular case of a dynamic wage equation. Particularly, we argue that the standard static Mincer equation is implicitly based on the hypothesis that the employee has full bargaining power, and provide (further) empirical evidence against this hypothesis.

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File URL: http://www.accessecon.com/Pubs/EB/2009/Volume29/EB-09-V29-I3-P32.pdf
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Bibliographic Info

Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 29 (2009)
Issue (Month): 3 ()
Pages: 1842-1849

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Handle: RePEc:ebl:ecbull:eb-09-00433

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Keywords: Mincer Equation; Return to Schooling; Wage Bargaining;

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  1. Taylor, John B., 1999. "Staggered price and wage setting in macroeconomics," Handbook of Macroeconomics, Elsevier, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 15, pages 1009-1050 Elsevier.
  2. Corrado Andini, 2007. "Returns to education and wage equations: a dynamic approach," Applied Economics Letters, Taylor & Francis Journals, Taylor & Francis Journals, vol. 14(8), pages 577-579.
  3. James J. Heckman & Lance J. Lochner & Petra E. Todd, 2003. "Fifty Years of Mincer Earnings Regressions," NBER Working Papers 9732, National Bureau of Economic Research, Inc.
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Cited by:
  1. Andini, Corrado, 2014. "Persistence Bias and Schooling Returns," IZA Discussion Papers 8143, Institute for the Study of Labor (IZA).

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