I wish to thank Stephen Nickell for his invaluable comments and insights; John Muellbauer, Jonathan Temple, Stephen Bond and two anonymous referees for their very helpful remarks. The usual disclaimer applies.
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Institutions and Wage Determination: a Multi-country Approach†
Article first published online: 22 JUL 2005
DOI: 10.1111/j.1468-0084.2005.00127.x
Additional Information
How to Cite
Nunziata, L. (2005), Institutions and Wage Determination: a Multi-country Approach. Oxford Bulletin of Economics and Statistics, 67: 435–466. doi: 10.1111/j.1468-0084.2005.00127.x
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Publication History
- Issue published online: 22 JUL 2005
- Article first published online: 22 JUL 2005
- Final Manuscript Received: February 2005
- Abstract
- Article
- References
- Cited By
Keywords:
- E24;
- J31;
- J51
Abstract
We present an empirical analysis of the determinants of labour cost in OECD countries, with particular reference to the impact of labour market institutions from 1960 to 1994. We show that labour market regulations can explain a large part of the labour cost rise in OECD countries in the last few decades once we control for productivity. These results are consistent with the findings of a companion paper [Nickell, Nunziata and Ochel (2005)Economic Journal, Vol. 115, pp. 1–27] where the effects of institutions on unemployment are examined. We present also a discussion of the econometric issues related to the estimation of a macro pooled model like ours. We focus, among other things, on the hypothesis of poolability and on the cointegration properties of the model. The explanatory power of the model is finally tested by means of a series of country by country dynamic simulations.