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Insider forces in wage determination: new evidence for Norwegian industries

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  • Kare Johansen

Abstract

Using panel data for Norwegian industries, we establish a significant permanent relation between industry wages and industry profitability. The estimated long-run insider weight is above 0.2 and stable both over time and across industries. Industry wages are significantly affected by aggregate unemployment, and the preferred wage equation implies a highly convex wage curve.

Suggested Citation

  • Kare Johansen, 1999. "Insider forces in wage determination: new evidence for Norwegian industries," Applied Economics, Taylor & Francis Journals, vol. 31(1), pages 137-147.
    • Handle: RePEc:taf:applec:v:31:y:1999:i:1:p:137-147
    DOI: 10.1080/000368499324624
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    References listed on IDEAS

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    1. Brunello, G. & Wadhwani, S., 1989. "The Determinants Of Wage Flexibility In Japan: Some Lessons From A Comparison With The Uk Using Micro-Data," Papers 362, London School of Economics - Centre for Labour Economics.
    2. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173.
    3. Wulfsberg, Fredrik, 1997. "An Application of Wage Bargaining Models to Norwegian Panel Data," Oxford Economic Papers, Oxford University Press, vol. 49(3), pages 419-440, July.
    4. Raaum, O. & Wulfsberg, F., 1995. "Unemployment, Labour Market Programmes and Wages in Norway," Memorandum 1995_024, Oslo University, Department of Economics.
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    1. Gunnar Bårdsen & Jurgen Doornik & Jan Tore Klovland, 2004. "A European-type wage equation from an American-style labor market: Evidence from a panel of Norwegian manufacturing industries in the 1930s," Working Paper 2004/8, Norges Bank.
    2. Kåre Johansen, "undated". "Nonlinear Wage Responses to Internal and External Factors," Working Paper Series 0902, Department of Economics, Norwegian University of Science and Technology, revised 25 Aug 2002.
    3. 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.
    4. Kees Folmer, 2009. "Why do macro wage elasticities diverge?," CPB Memorandum 224.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    5. Bertil Holmlund, 2013. "Wage and employment determination in volatile times: Sweden 1913-1939," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 7(2), pages 131-159, May.
    6. Marc van der Steeg & Roel van Elk & Dinand Webbink, 2012. "Does intensive coaching reduce school dropout?," CPB Discussion Paper 224.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    7. Kåre Johansen, 2002. "Regional Wage Curves Empirical Evidence from Norway," Working Paper Series 0302, Department of Economics, Norwegian University of Science and Technology.
    8. Ipek Ilkaracan & Raziye Selim, 2002. "The Role of Unemployment in Wage Determination: Further Evidence on the Wage Curve from Turkey," SCEPA working paper series. 2002-11, Schwartz Center for Economic Policy Analysis (SCEPA), The New School.
    9. Kees Folmer, 2009. "Why do macro wage elasticities diverge? A meta analysis," CPB Discussion Paper 122, CPB Netherlands Bureau for Economic Policy Analysis.
    10. Kees Folmer, 2009. "Why do macro wage elasticities diverge?," CPB Memorandum 224, CPB Netherlands Bureau for Economic Policy Analysis.

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