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Internal and External Forces in Sectoral Wage Formation: Evidence from the Netherlands

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  • Graafland, J.J.
  • Lever, M.H.C.

Abstract

The purpose of this paper is to investigate the relative importance of internal (sector-specific) and external (labor market) forces in sectoral wage formation in the Netherlands (1967-90). The results show that wages are largely determined by external forces, although internal forces are significant as well. The impact of the number of insiders, which plays a role in unemployment persistence, is not significant. Separate estimation results show that the impact of internal forces and of unemployment is weaker in the industrial sectors than in the service sectors. This casts doubt on the presumption that insider power increases the impact of internal forces on wage formation. Copyright 1996 by Blackwell Publishing Ltd
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Suggested Citation

  • Graafland, J.J. & Lever, M.H.C., 1994. "Internal and External Forces in Sectoral Wage Formation: Evidence from the Netherlands," Papers 9412-e, Research Institute for Small and Midium Sized Business - Research Report.
    • Handle: RePEc:fth:smsbrr:9412-e
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    Cited by:

    1. Bande, Roberto & Fernández, Melchor & Montuenga, Víctor, 2008. "Regional unemployment in Spain: Disparities, business cycle and wage setting," Labour Economics, Elsevier, vol. 15(5), pages 885-914, October.
    2. Goran Vukšić, 2012. "Sectoral wage dynamics and intersectoral linkages in the context of export competitiveness: the case of Croatia," wiiw Balkan Observatory Working Papers 99, The Vienna Institute for International Economic Studies, wiiw.
    3. Bijlsma, Michiel & Boone, Jan & Zwart, Gijsbert, 2009. "Selective contracting and foreclosure in health care markets," CEPR Discussion Papers 7576, C.E.P.R. Discussion Papers.
    4. DREGER, Christian & REIMERS, Hans-Eggert, 2011. "On The Role Of Sectoral And National Wage Components In The Wage Bargaining Process," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 11(1).
    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. Ruud de Mooij, 2007. "Reinventing the Dutch tax-benefit system; exploring the frontier of the equity-efficiency trade-off," CPB Discussion Paper 88, CPB Netherlands Bureau for Economic Policy Analysis.
    7. Graafland, Johan J. & de Mooij, Ruud A., 1999. "Fiscal policy and the labour market: An AGE analysis," Economic Modelling, Elsevier, vol. 16(2), pages 189-219, April.
    8. Ruud Mooij, 2008. "Reinventing the Dutch tax-benefit system: exploring the frontier of the equity-efficiency trade-off," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 15(1), pages 87-103, February.
    9. Roland de Bruijn, 2006. "Scale Economies and Imperfect Competition in WorldScan," CPB Memorandum 140.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    10. Dreger, Christian & Reimers, Hans-Eggert, 2010. "On the Role of Sectoral and National Components in the Wage Bargaining Process," IZA Discussion Papers 4908, Institute of Labor Economics (IZA).
    11. Bovenberg, A.L., 2003. "Tax Policy and Labor Market Performance," Discussion Paper 2003-90, Tilburg University, Center for Economic Research.
    12. Lever, Marcel H. C. & van Werkhooven, Jolanda M., 1996. "Insider power, market power, firm size and wages: Evidence from Dutch manufacturing industries," Labour Economics, Elsevier, vol. 3(1), pages 93-107, August.
    13. Bovenberg, A.L., 2003. "Tax Policy and Labor Market Performance," Other publications TiSEM 68fd52eb-a6d6-4300-8636-c, Tilburg University, School of Economics and Management.
    14. Goran Vukšić, 2018. "Pre-Crisis Wage Leadership in Croatia in the Context of Export Competitiveness: Any Lessons for the Future?," Prague Economic Papers, Prague University of Economics and Business, vol. 2018(3), pages 306-330.
    15. repec:prg:jnlpep:v:preprint:id:655:p:1-25 is not listed on IDEAS
    16. 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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    Keywords

    wages ; labour market;

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