Follow the leader? Public and private wages in the Netherlands

Annette Zeilstra () and Adam Elbourne ()
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Annette Zeilstra: CPB Netherlands Bureau for Economic Policy Analysis
Adam Elbourne: CPB Netherlands Bureau for Economic Policy Analysis

No 274, CPB Discussion Paper from CPB Netherlands Bureau for Economic Policy Analysis

Abstract: This study investigates wage leadership in the Netherlands. We empirically examine public and private wages using several wage definitions for the period 1980-2012. We find no evidence for public wage leadership. Moreover, public wages return to their previous equilibrium value three to four years after an exogenous shock in public wages. By contrast, an exogenous shock to private wages has a permanent influence on both private and public wages. These findings suggest that although a public wage freeze lowers public expenditure in the short-run, it is not an effective policy measure to lower public expenditure in the medium and long-run.

JEL-codes: C32 E62 H50 J30 (search for similar items in EconPapers)
Date: 2014-04
New Economics Papers: this item is included in nep-lab and nep-mac
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:cpb:discus:274

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