6533b7d8fe1ef96bd12696ed
RESEARCH PRODUCT
Wage Drift: Phillips Curve vs Bargaining Models
Jyri ViskariJaakko Pehkonensubject
MicroeconomicsEarningsmedia_common.quotation_subjectGeography Planning and DevelopmentEconomicsWageContext (language use)Phillips curveDemographymedia_commondescription
: The purpose of this paper is to shed light on the debate on market- versus bargaining-determined total earnings by examining whether models of wage drift based on wage-bargaining considerations empirically outperform models based on simple ad hoc formulations relating wage drift to excess demand for labour. The task is carried out by investigating the empirical performance of two bargaining models and two Phillips curve models in the context of data on the Finnish metal industry. The results suggest that the former perform better than the latter, thus providing support for the hypothesis that total earnings are bargaining-determined. Furthermore, the results are in line with the view that the superiority of wage-bargaining models is not only theoretical but also empirical.
| year | journal | country | edition | language |
|---|---|---|---|---|
| 1994-09-01 | Labour |