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Wage Bargaining and the (Dynamic) Mincer Equation

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  • Andini, Corrado

    ()
    (University of Madeira)

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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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3822.

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Length: 16 pages
Date of creation: Nov 2008
Date of revision:
Publication status: published in: Economics Bulletin, 2009, 29 (3), 1846-1853
Handle: RePEc:iza:izadps:dp3822

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Related research

Keywords: Mincer equation; return to schooling; wage bargaining;

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  1. John B. Taylor, 1998. "Staggered Price and Wage Setting in Macroeconomics," NBER Working Papers 6754, National Bureau of Economic Research, Inc.
  2. Heckman, James J. & Lochner, Lance & Todd, Petra E., 2003. "Fifty Years of Mincer Earnings Regressions," IZA Discussion Papers 775, Institute for the Study of Labor (IZA).
  3. Corrado Andini, 2007. "Returns to education and wage equations: a dynamic approach," Applied Economics Letters, Taylor & Francis Journals, vol. 14(8), pages 577-579.
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