A Cointegration Model for Search Equilibrium Wage Formation
Frank A.G. den Butter and
Udo Kock ()
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Lourens Broersma: Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics
No 21, Serie Research Memoranda from VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics
In flow models of the labor market, wages are determined by negotiations between workers and employers on the surplus value of a realized match. From this perspective, this paper presents an econometric analysis of the influence of labor market flows on wage formation as an alternative to the traditional specification of wage equations in which unemployment represents Phillips- curve or wage-curve effects. The paper estimates a dynamic wage equation for the Netherlands using a cointegration approach. It finds that labor flows, and notably flows from outside the labor market, are important determinants of both short-run and long-run wage setting
Keywords: wage curve; labor market flows; cointegration model (search for similar items in EconPapers)
JEL-codes: J31 C51 (search for similar items in EconPapers)
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Journal Article: A cointegration model for search equilibrium wage formation (2006)
Working Paper: A Cointegration Model for Search Equilibrium Wage Formation (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:vua:wpaper:2003-21
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