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Wage Bargaining and the (Dynamic) Mincer Equation

Author

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  • Corrado Andini

    () (University of Madeira, CEEAplA and IZA)

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.

Suggested Citation

  • Corrado Andini, 2009. "Wage Bargaining and the (Dynamic) Mincer Equation," Economics Bulletin, AccessEcon, vol. 29(3), pages 1842-1849.
    • Handle: RePEc:ebl:ecbull:eb-09-00433
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    File URL: http://www.accessecon.com/Pubs/EB/2009/Volume29/EB-09-V29-I3-P32.pdf
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    References listed on IDEAS

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    1. Taylor, John B., 1999. "Staggered price and wage setting in macroeconomics," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 15, pages 1009-1050, Elsevier.
    2. James J. Heckman & Lance J. Lochner & Petra E. Todd, 2003. "Fifty Years of Mincer Earnings Regressions," NBER Working Papers 9732, National Bureau of Economic Research, Inc.
    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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    Cited by:

    1. Andini, Corrado, 2017. "Tertiary Education for All and Wage Inequality: Policy Insights from Quantile Regression," IZA Policy Papers 132, Institute of Labor Economics (IZA).
    2. Andini, Corrado, 2009. "How Fast Do Wages Adjust to Human-Capital Productivity? Dynamic Panel-Data Evidence from Belgium, Denmark and Finland," IZA Discussion Papers 4583, Institute of Labor Economics (IZA).
    3. Andini, Corrado, 2014. "Persistence Bias and Schooling Returns," IZA Discussion Papers 8143, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    Mincer Equation; Return to Schooling; Wage Bargaining;
    All these keywords.

    JEL classification:

    • I2 - Health, Education, and Welfare - - Education
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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