Who ultimately bears the burden of greater non-wage labour costs?
AbstractWe investigate the effect of a rise in non-wage labour costs (NWLC) on real manufacturing labour costs in OECD countries, taking into account the degree of coordination in the wage bargaining process. We find that, in countries in which wage bargaining is not highly coordinated, 55% of an increase in NWLC appears to be shifted to workers in the long run, whereas in countries operating under a highly coordinated bargaining regime, full shifting occurs. Overall, our results suggest that high NWLC can be associated with a high equilibrium unemployment rate, but only in those OECD countries that do not have highly coordinated wage bargaining.
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Bibliographic InfoPaper provided by Business School - Economics, University of Glasgow in its series Working Papers with number 2010_02.
Date of creation: Jan 2010
Date of revision:
labour costs; tax wedge; wage determination; bargaining coordination.;
Other versions of this item:
- Rodolphe Desbordes & CÃ©line AzÃ©mar, 2010. "Who Ultimately Bears the Burden of Greater Non-Wage Labour costs?," Working Papers 1004, University of Strathclyde Business School, Department of Economics.
- Azémar, Céline & Desbordes, Rodolphe, 2010. "Who Ultimately Bears the Burden of Greater Non-Wage Labour costs?," SIRE Discussion Papers 2010-12, Scottish Institute for Research in Economics (SIRE).
- H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
- H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
- J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Private Pensions
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-02-13 (All new papers)
- NEP-CBA-2010-02-13 (Central Banking)
- NEP-LAB-2010-02-13 (Labour Economics)
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