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Wage Adjustments and Labour Market Systems: A Cross‐Country Analysis

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  • G. WITHERS
  • D. PITMAN
  • B. WHITTINGHAM

Abstract

Evidence is presented on how well alternative systems of wage determination facilitate disaggregate labour market adjustment. Tests of statistical causality are used to relate labour market pressure to relative wage changes. The conclusion is that rates of change of relative wages are determined independently of the microeconomic market balance. This result holds irrespective of the institutional form of the wage‐fixing system.

Suggested Citation

  • G. Withers & D. Pitman & B. Whittingham, 1986. "Wage Adjustments and Labour Market Systems: A Cross‐Country Analysis," The Economic Record, The Economic Society of Australia, vol. 62(4), pages 415-426, December.
    • Handle: RePEc:bla:ecorec:v:62:y:1986:i:4:p:415-426
    DOI: 10.1111/j.1475-4932.1986.tb00907.x
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    References listed on IDEAS

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    1. Sargent, Thomas J, 1976. "A Classical Macroeconometric Model for the United States," Journal of Political Economy, University of Chicago Press, vol. 84(2), pages 207-237, April.
    2. repec:pri:indrel:dsp01dr26xx382 is not listed on IDEAS
    3. repec:bla:ecorec:v:59:y:1983:i:167:p:384-97 is not listed on IDEAS
    4. Granger, C. W. J. & Newbold, P., 1974. "Spurious regressions in econometrics," Journal of Econometrics, Elsevier, vol. 2(2), pages 111-120, July.
    5. Orley Ashenfelter & David Card, 1982. "Time Series Representations of Economic Variables and Alternative Models of the Labour Market," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 49(5), pages 761-782.
    6. Michael Keating, 1983. "Relative Wages and the Changing Industrial Distribution of Employment in Australia," The Economic Record, The Economic Society of Australia, vol. 59(4), pages 384-397, December.
    7. Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-438, July.
    8. Christopher A. Pissarides, 1978. "The Role of Relative Wages and Excess Demand in the Sectoral Flow of Labour," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 45(3), pages 453-467.
    9. Thurow, Lester, 1983. "Dangerous Currents: The State of Economics," OUP Catalogue, Oxford University Press, number 9780198771838.
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    Cited by:

    1. Elizabeth Webster & Yi‐Ping Tseng, 2002. "The Determinants of Relative Wage Change in Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 35(1), pages 70-84, March.
    2. Michael Coelli & Jerome Fahrer & Holly Lindsay, 1994. "Wage Dispersion and Labour Market Institutions: A Cross Country Study," RBA Research Discussion Papers rdp9404, Reserve Bank of Australia.

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