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The Neoclassical Determinants of Real Wage


Author Info

  • Mehmet Ivrendi

    (Department of Economics, Pamukkale University)

  • Bulent Guloglu

    (Department of Economics, Pamukkale University)

  • Ý. Hakan Yetkiner

    (Department of Economics, Izmir University of Economics)


This paper presents empirical evidence that the neoclassical explanation of real wage has a high explanatory power at macro level. The factor endowments explanation of wage is surprisingly rare in the literature, at least at empirical level. In this paper, using panel data from 26 OECD countries, we show that technology and factor endowments (physical capital and labor stocks) have a significant explanatory power on the determination of real wage. Based on our results, we speculate that the supply-side rather than demand-side variables may be the major source of wage differences across countries.

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Bibliographic Info

Paper provided by Izmir University of Economics in its series Working Papers with number 1304.

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Length: 13 pages
Date of creation: Apr 2013
Date of revision:
Handle: RePEc:izm:wpaper:1304

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Related research

Keywords: wage; factor endowment; inter-country wage differences; panel data;

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