Markups in a dual labour market: the case of the Netherlands

Harro van Heuvelen (), Leon Bettendorf () and Gerdien Meijerink
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Harro van Heuvelen: CPB Netherlands Bureau for Economic Policy Analysis
Leon Bettendorf: CPB Netherlands Bureau for Economic Policy Analysis

No 410, CPB Discussion Paper from CPB Netherlands Bureau for Economic Policy Analysis

Abstract: We follow the production function approach to assess markups, which requires the estimation of the output elasticity of a free input. In the basic setup we estimate a structural value added production function, using temporary contract hours as free input. We find rather stable markups in the Netherlands in the period 2006-2016. We show that extending the free variable incorrectly with fixed contract hours results in an increasing markup. Findings are robust to an alternative setup, in which a gross output function is specified and materials are used as free input. Implications for applied work and policy are discussed.

JEL-codes: J30 J31 J41 J62 (search for similar items in EconPapers)
Date: 2020-02
New Economics Papers: this item is included in nep-isf and nep-iue
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Related works:
Journal Article: Markups in a dual labour market: The case of the Netherlands (2021)
Working Paper: Markups in a Dual Labor Market: The Case of the Netherlands (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:cpb:discus:410

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