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Wages, Taxes and the Utility-Maximizing Trade Union: A Confrontationwith Norwegian Data

Author

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  • Hersoug, Tor
  • Kjaer, Knut N
  • Rodseth, Asbjorn

Abstract

This paper estimates a model of wage formation where the central assumptions are: (1) exce pt for a random error term, the aggregate wage level is determined by a single t rade union; (2) union utility depends on the real disposable wage and on employm ent; and (3) firmsdetermine employment and react to wage increases by reducing employment. The purpose is to see whether such a theory can be made operational and whether the model can be made to fit reasonably well with Norwegian data (19 62-82). Results are mixed and do not give much support to the approach taken, bu t several possibilities for further refinement remain. Copyright 1986 by Royal Economic Society.

Suggested Citation

  • Hersoug, Tor & Kjaer, Knut N & Rodseth, Asbjorn, 1986. "Wages, Taxes and the Utility-Maximizing Trade Union: A Confrontationwith Norwegian Data," Oxford Economic Papers, Oxford University Press, vol. 38(3), pages 403-423, November.
    • Handle: RePEc:oup:oxecpp:v:38:y:1986:i:3:p:403-23
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    Citations

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    Cited by:

    1. Kim Hawtrey, 1990. "Dynamic Behaviour of a Unionized Solow‐Swan Economy," The Economic Record, The Economic Society of Australia, vol. 66(2), pages 81-92, June.
    2. Forslund, Anders & Gottfries, Nils & Westermark, Andreas, 2005. "Real and Nominal Wage Adjustment in Open Economies," Working Paper Series 2005:18, Uppsala University, Department of Economics.
    3. Bovenberg, A. Lans & Graafland, Johan J. & de Mooij, Ruud A., 2000. "Tax reform and the Dutch labor market: an applied general equilibrium approach," Journal of Public Economics, Elsevier, vol. 78(1-2), pages 193-214, October.
    4. David G. Blanchflower & Andrew J. Oswald, 1995. "The Wage Curve," MIT Press Books, The MIT Press, edition 1, volume 1, number 026202375x, April.
    5. Henk Kox & Hugo Rojas-Romagosa, 2010. "Exports and Productivity Selection Effects for Dutch Firms," De Economist, Springer, vol. 158(3), pages 295-322, September.
    6. Holm, Pasi & Honkapohja, Seppo & Koskela, Erkki, 1990. "A monopoly union model of wage determination with taxes and endogenous capital stock : an empirical application to the finnish manufacturing industry," Research Discussion Papers 24/1990, Bank of Finland.
    7. repec:zbw:bofrdp:1990_024 is not listed on IDEAS
    8. Machiel Mulder & Gijsbert Zwart, 2006. "Market failures and government policies in gas markets," CPB Memorandum 143.rdf, CPB Netherlands Bureau for Economic Policy Analysis.

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