IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Unexpected Inflation, Real Wages, and Employment Determination in Union Contracts

  • David Card

    (Princeton University)

Registered author(s):

    This paper presents new evidence on the relevance of nominal contracting models for employment determination in long term union contracts. A key aspect of these contracts, much emphasized in the macroeconomics literature, is the predetermined nature of nominal wages. Real wage rates therefore contain unanticipated components that reflect unexpected changes in prices and the degree of indexation in the contract. The empirical analysis, based on a sample of 1300 indexed and non-indexed contracts from the Canadian manufacturing sector, indicates that unexpected real wage changes are associated with systematic employment responses in the opposite direction. I conclude that nominal contracting provisions play a potentially important role in the cyclical properties and persistence of employment in the union sector.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: no

    Paper provided by Princeton University, Department of Economics, Industrial Relations Section. in its series Working Papers with number 612.

    in new window

    Date of creation: May 1988
    Date of revision:
    Handle: RePEc:pri:indrel:232
    Contact details of provider: Postal:
    Firestone Library, Princeton, New Jersey 08544-2098

    Phone: 609 258-4041
    Fax: 609 258-2907
    Web page:

    More information through EDIRC

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:pri:indrel:232. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bobray Bordelon)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.