Testing Between Alternative Wage-Employment Bargaining Models Using Belgian Aggreggate Data

Vincent J. Vannetelbosch
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Vincent J. Vannetelbosch: UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)

No 1994012, LIDAM Discussion Papers IRES from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: In this paper, I discriminate among alternative models of bargaining for wages and employment (right-to-manage, efficient bargaining and general bargaining models) using Belgian aggregate data. I estimate the ECM representation of a dynamic employment equation for each model using Engle-Granger’s two-step estimation procedure. I use Phillips-Hansen’s FME to obtain long-run parameters’ estimators which are optimal and asymptotically normally distributed. On the basis of non-nested tests, both the right-to-manage and the hypothesis that wage-employment negotiations are efficient are ejected in favour of the general bargaining model where outcomes are inefficient.

Keywords: wages; bargaining; cointegration; non-nested tests (search for similar items in EconPapers)
JEL-codes: C22 C52 J50 (search for similar items in EconPapers)
Pages: 23
Date: 1993-12-01, Revised 1994-04-27
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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvir:1994012

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