Union wage setting and unemployment in the Netherlands (1965-1987)

This paper presents an empirical model of union wage setting and employment. The (Stackelberg) equilibrium unemployment rate is shown to be a function of taxes, the replacement ratio, the gap between consumer and producer prices, productivity effects, and the rate of long-term unemployment. The mode...

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Bibliographic Details
Published in:Applied economics 1991-10, Vol.23 (10), p.1579-1585
Main Author: Lever, Marcel
Format: Article
Language:English
Subjects:
Comparative studies
Economic conditions
Economic models
Economic theory
Effects
Equilibrium
Labor unions
Netherlands
Statistical analysis
Trade unions
Unemployment
Wage rates
Wages
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Summary:This paper presents an empirical model of union wage setting and employment. The (Stackelberg) equilibrium unemployment rate is shown to be a function of taxes, the replacement ratio, the gap between consumer and producer prices, productivity effects, and the rate of long-term unemployment. The model is estimated with aggregate data from the private sector in the Netherlands (1965-1987). The results suggest that the equilibrium unemployment rate is pushed upwards by taxes, the replacement ratio and by the gap between consumer and producer prices, and is reduced by productivity effects. Insider-outsider effects appear insignificant.
ISSN:0003-6846
1466-4283
DOI:10.1080/00036849100000122