On Wage Formation, Wage Development and Flexibility: A Comparison between European Countries and the United States
16 Pages Posted: 1 Dec 2008
There are 2 versions of this paper
On Wage Formation, Wage Development and Flexibility: A Comparison between European Countries and the United States
Date Written: November, 27 2008
Abstract
We derive a non-linear wage equation from a wage bargaining model and estimate an error correction model for Germany, Spain, France, the Netherlands and the US. Based on the estimated parameters, we derive time-varying elasticities of wages with respect to its determinants labour productivity, prices, taxes, unemployment and the replacement rate. Moreover, we quantify the contribution of each determinant to the wage increase. The dominant role of prices in the wage formation in the seventies and eighties was taken over by labour productivity for the US and unemployment in Spain and the Netherlands at the end of the nineties.
Keywords: wage formation, labour market flexibility
JEL Classification: C22, E24, J30
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
EUROMON: The Multi-Country Model of De Nederlandsche Bank
By Maria Demertzis, Peter van Els, ...
-
By Marga Peeters and Ard Den Reijer
-
By Maria-carmen Guisan and E. Aguayo