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INSIDER‐OUTSIDER EFFECTS IN WAGE FORMATION: AN EMPIRICAL SURVEY *
Author(s) -
Lever Marcel H. C.
Publication year - 1995
Publication title -
bulletin of economic research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.227
H-Index - 29
eISSN - 1467-8586
pISSN - 0307-3378
DOI - 10.1111/j.1467-8586.1995.tb00613.x
Subject(s) - economics , insider , unemployment , wage , term (time) , unemployment rate , labour economics , empirical research , efficiency wage , wage rate , duration (music) , empirical evidence , work (physics) , macroeconomics , philosophy , physics , epistemology , quantum mechanics , political science , law , mechanical engineering , art , literature , engineering
The paper provides a review of empirical work on insider‐outsider and duration effects in wage formation. It presents a theoretical model to investigate the relationship between previous employment and the wage rate. The impact of unemployment and long‐term unemployment is considered. Empirical results show that the effect of previous employment on the wage rate is generally insignificant. Both short‐term and long‐term unemployment appear to have a significant negative impact. Micro‐studies reveal that both firm‐specific and aggregate variables play a role in wage determination.