Labour market institutions and wage inequality
Koeniger, Winfried ; Leonardi, Marco ; Nunziata, Luca
Institute of Labor Economics, Bonn
IZA - Bonn
2004
34 p.
labour market ; minimum wage ; skill ; statistics ; trade union role ; unemployment ; wage differential
Discussion Paper Series
1291
Wages and wage payment systems
English
Bibliogr.
"In this paper we investigate the importance of labor market institutions such as unemployment insurance, unions, firing regulation and minimum wages for the evolution of wage inequality across countries. We derive a simple log-linear equation of the wage differential as a function of the institutional parameters, total factor productivity, final good prices and relative skill supply. Our estimates for 11 OECD countries imply that labor market institutions can account for a large part of the change of wage inequality across countries after controlling for time and country effects."
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