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Wage Formation and Bargaining Power during the Great Depression *
Author(s) -
Bårdsen Gunnar,
Doornik Jurgen A.,
Klovland Jan Tore
Publication year - 2010
Publication title -
scandinavian journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.725
H-Index - 64
eISSN - 1467-9442
pISSN - 0347-0520
DOI - 10.1111/j.1467-9442.2009.01599.x
Subject(s) - economics , wage , estimator , great depression , unemployment , homogeneous , interwar period , econometrics , productivity , bargaining power , panel data , wage bargaining , labour economics , macroeconomics , microeconomics , statistics , mathematics , archaeology , world war ii , history , physics , thermodynamics
We present an econometric analysis of wage behaviour in Norway during the interwar years. The analysis is based on a panel of manufacturing industry data using GMM estimation methods. Our empirical analysis shows that wage formation in the interwar period can be understood with the help of modern bargaining theory and well‐established wage equations. We estimate a long‐run wage curve that has all the standard features of being homogeneous in prices, proportional to productivity, and with a negative unemployment elasticity. We also present some new Monte Carlo evidence on the properties of the estimators used.