Insider-Outsider Effects in Wage Formation: An Empirical Survey

Marcel H C Lever

Bulletin of Economic Research, 1995, vol. 47, issue 4, 257-74

Abstract: The paper provides a review of empirical work on insider-outsider and duration effects in wage formation. It presents a theoretical model to investigate the relationship between previous employment and the wage rate. The impact of unemployment and long-term unemployment is considered. Empirical results show that the effect of previous employment on the wage rate is generally insignificant. Both short-term and long-term unemployment appear to have a significant negative impact. Micro-studies reveal that both firm-specific and aggregate variables play a role in wage determination. Copyright 1995 by Blackwell Publishing Ltd and the Board of Trustees of the Bulletin of Economic Research

Date: 1995
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