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Wage Formation and Bargaining Power during the Great Depression

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  • Gunnar Bårdsen
  • Jurgen A. Doornik
  • Jan Tore Klovland

Abstract

We present an econometric analysis of wage behaviour in Norway during the interwar years. The analysis is based on a panel of manufacturing industry data using GMM estimation methods. Our empirical analysis shows that wage formation in the interwar period can be understood with the help of modern bargaining theory and well‐established wage equations. We estimate a long‐run wage curve that has all the standard features of being homogeneous in prices, proportional to productivity, and with a negative unemployment elasticity. We also present some new Monte Carlo evidence on the properties of the estimators used.

Suggested Citation

  • Gunnar Bårdsen & Jurgen A. Doornik & Jan Tore Klovland, 2010. "Wage Formation and Bargaining Power during the Great Depression," Scandinavian Journal of Economics, Wiley Blackwell, vol. 112(1), pages 211-233, March.
    • Handle: RePEc:bla:scandj:v:112:y:2010:i:1:p:211-233
    DOI: 10.1111/j.1467-9442.2009.01599.x
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    2. Ragnar Nymoen, 2017. "Between Institutions and Global Forces: Norwegian Wage Formation Since Industrialisation," Econometrics, MDPI, vol. 5(1), pages 1-54, January.

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