Wage formation in Finland, 1960-1994
In this study we examine wage formation in Finland. One distinctive feature of the study is the long investigation period that spans the thirty-five-year period from 1961 to 1994, and thus includes the turbulent years of the early 1990s. The results imply that productivity growth is the main determinant of wage growth. In addition, real wage growth is affected by unemployment, union power, replacement rate, import prices and various taxes. One conclusion of this study is that all previous results – as well as those reported in this paper – how different taxes influence real labour costs in the long-run must be treated with considerable care. Although our results reject the idea that all taxes are borne by labour in the long run, we cannot be sure that the opposite is true. It is, however, tempting to argue that in a world of imperfectly functioning markets and imprecise information various taxes lead to higher labour costs and, consequently, that the structure of taxation matters to wages and thus to unemployment at least at the medium term.
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Volume (Year): 12 (1999)
Issue (Month): 2 (Autumn)
Pages: 82-91
| Handle: | RePEc:fep:journl:v:12:y:1999:i:2:p:82-91 |
| Contact details of provider: | Web page: http://www.taloustieteellinenyhdistys.fi More information through EDIRC
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References listed on IDEAS
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- Machin, Stephen & Manning, Alan, 1999.
"The causes and consequences of longterm unemployment in Europe,"
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- repec:sae:niesru:v:111:y::i:1:p:62-85 is not listed on IDEAS
- Koskela, Erkki & Vilmunen, Jouko, 1996. "Tax progression is good for employment in popular models of trade union behaviour," Labour Economics, Elsevier, vol. 3(1), pages 65-80, August.
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- Jaakko Kiander & Jaakko Pehkonen, 1999. "Finnish unemployment: observations and conjectures," Finnish Economic Papers, Finnish Economic Association, vol. 12(2), pages 94-108, Autumn.
- Pasi Holm & Seppo Honkapohja & Erkki Koskela, 1993. "Incidence effects of proposed reforms for the payroll tax in Finnish manufacturing," Finnish Economic Papers, Finnish Economic Association, vol. 6(2), pages 67-78, Autumn. Full references (including those not matched with items on IDEAS)
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