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Dimensions of the Wage-Unemployment Relationship in the Nordic Countries: Wage Flexibility without Wage Curves

Karsten Albæk, Rita Asplund, Stig Blomskog, Erling Barth (), Björn Rúnar Guðmundsson, Vifill Karlsson and Erik Madsen
Additional contact information
Rita Asplund: The Research Institute of the Finnish Economy, Helsinki
Stig Blomskog: University College of South Stockholm
Björn Rúnar Guðmundsson: Ministry of Finance, Iceland
Vifill Karlsson: The Icelandic University College of Business Administration

No 99-24, Discussion Papers from University of Copenhagen. Department of Economics

Abstract: This paper analyses wage formation in the Nordic countries at the regional level by the use of micro-data. Our results deviate systematically from the main conclusions drawn by Blanchflower and Oswald (1994). We find no stable negative relation between wages and unemployment across regions in the Nordic labor markets once regional fixed effects are accounted for. Wage formation at the regional level is characterized by considerable persistence, but unemployment exerts no immediate influence on wages at the regional level. There is no evidence of a wage curve, nor of a Phillips curve, at the regional level in the Nordic countries. The results are consistent with a theoretical model where central bargaining agents determine a national wage increment, and local bargaining agents determine wage drift.

Keywords: wage curve; Phillips curve; regional unemployment and wages (search for similar items in EconPapers)
JEL-codes: J30 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-lab and nep-ltv
Date: 1999-11
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Citations: View citations in EconPapers (10) Track citations by RSS feed

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Related works:
Working Paper: Dimensions of the Wage-Unemployment Relationship in the Nordic Countries: Wage Flexibility Without Wage Curves (2000) Downloads
Working Paper: Domensions of the Wage-Unemployment Relationship in the Nordic Countries: Wage Flexibility without Wage Curves (1999)
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