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Wage Dispersion and Labour Market Institutions: A Cross Country Study

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Author Info
Michael Coelli (Reserve Bank of Australia)
Jerome Fahrer (Reserve Bank of Australia)
Holly Lindsay (Reserve Bank of Australia)

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Abstract

This paper examines the issue of wage flexibility in an international context using sectoral wage dispersion data from fourteen OECD countries. An emphasis is placed on the evaluation of Australian institutions and data. We draw comparisons between a measure of wage dispersion and the degree of centralisation of a country's wage setting institution to determine whether decentralised wage setting institutions are necessarily associated with more flexible wages. Inter-country comparisons are drawn among the levels of wage dispersion over time, and the relationship between wages and demand conditions for labour, including productivity and relative prices, are examined. We observe that no strong systematic relationship exists between wage dispersion and the degree of centralisation of labour market institutions. We also find that relative to most other OECD countries for which data are available, Australian wages were strongly correlated both with labour demand conditions and productivity growth over the period 1975-90.

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Paper provided by Reserve Bank of Australia in its series RBA Research Discussion Papers with number rdp9404.

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Date of creation: Jun 1994
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Handle: RePEc:rba:rbardp:rdp9404

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Lars Calmfors, 1993. "Centralisation of Wage Bargaining and Macroeconomic Performance: A Survey," OECD Economics Department Working Papers 131, OECD, Economics Department. [Downloadable!]
  2. Withers, Glenn & Pitman, D & Whittingham, B, 1986. "Wage Adjustments and Labour Market Systems: A Cross-Country Analysis," The Economic Record, The Economic Society of Australia, vol. 62(179), pages 415-26, December.
  3. Keating, Michael, 1983. "Relative Wages and the Changing Industrial Distribution of Employment in Australia," The Economic Record, The Economic Society of Australia, vol. 59(167), pages 384-97, December.
  4. Nickell, Stephen J, 1990. "Unemployment: A Survey," Economic Journal, Royal Economic Society, vol. 100(401), pages 391-439, June. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. James Ted McDonald & Christopher Worswick, 2000. "Earnings and Employment Probabilities of Men by Education and Birth Cohort, 1982-96: Evidence for the United States, Canada and Australia," Carleton Economic Papers 00-04, Carleton University, Department of Economics. [Downloadable!]
  2. Jerome Fahrer & Andrew Pease, 1994. "International Trade and the Australian Labour Market," RBA Annual Conference Volume, in: Philip Lowe & Jacqueline Dwyer (ed.), International Intergration of the Australian Economy Reserve Bank of Australia. [Downloadable!]
  3. John Freebairn, 1998. "Microeconomics of the Australian Labour Market," RBA Annual Conference Volume, in: Guy Debelle & Jeff Borland (ed.), Unemployment and the Australian Labour Market Reserve Bank of Australia. [Downloadable!]
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