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An Econometric Study of the Behaviour of Real Wages in Two French Industries

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  • A T Flegg
  • J D Boardley
  • C D Webber
  • G C Mulvey

Abstract

This paper examines the behaviour of real wages in the French textile and paper industries. The econometric analysis is embedded within theoretical framework of the insider-outsider hypothesis. The models attempt to measure the impact of insiders and outsiders on real wages, and the part that insiders play in creating hysteresis in employment. The analysis uses a range of industry-specific and aggregate variables to measure the influence of insiders and outsiders. Quarterly data for the period 1972-97 are employed. The econometric results indicate that both internal and external variables play a statistically significant role in explaining changes in real wages, and that the pure insider-outsider hypothesis can be rejected for both industries. As far as its authors are aware, this paper is the first to test for insider power in French industry.

Suggested Citation

  • A T Flegg & J D Boardley & C D Webber & G C Mulvey, 2000. "An Econometric Study of the Behaviour of Real Wages in Two French Industries," Economic Issues Journal Articles, Economic Issues, vol. 5(1), pages 41-60, March.
    • Handle: RePEc:eis:articl:100flegg
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