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Testing for Independence of Wage Drift and Minimum Contractual Wage: An Empirical Investigation Using Italian Aggregate Time Series
Author(s) -
Lupi Claudio,
Ordine Patrizia
Publication year - 1993
Publication title -
labour
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.403
H-Index - 34
eISSN - 1467-9914
pISSN - 1121-7081
DOI - 10.1111/j.1467-9914.1993.tb00211.x
Subject(s) - economics , independence (probability theory) , series (stratigraphy) , aggregate (composite) , wage , granger causality , wage bargaining , econometrics , minimum wage , time series , empirical evidence , labour economics , mathematics , statistics , paleontology , philosophy , materials science , epistemology , composite material , biology
A theoretical two‐stage bargaining model for wage drift and minimum contractual wage is discussed and its implication in terms of Granger‐causality between the two variables is tested by using Italian aggregate time series. Empirical evidence suggests rejecting the independence of the two series. This result has, in turn, implications for policy analysis. Our findings seem to indicate the appropriateness of a policy oriented towards decentralized wage setting.