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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- Nickell, Stephen & Layard, Richard, 1999. "Labor market institutions and economic performance," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 46, pages 3029-3084 Elsevier.
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- Nickell, S J & Andrews, M, 1983. "Unions, Real Wages and Employment in Britain 1951-79," Oxford Economic Papers, Oxford University Press, vol. 35(0), pages 183-206, Supplemen.
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