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INTERNAL AND EXTERNAL FORCES IN SECTORAL WAGE FORMATION: EVIDENCE FROM THE NETHERLANDS
Author(s) -
Graafland Johan J.,
Lever Marcel H. C.
Publication year - 1996
Publication title -
oxford bulletin of economics and statistics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.131
H-Index - 73
eISSN - 1468-0084
pISSN - 0305-9049
DOI - 10.1111/j.1468-0084.1996.mp58002002.x
Subject(s) - presumption , insider , economics , wage , unemployment , labour economics , tertiary sector of the economy , internal forces , macroeconomics , economy , structural engineering , political science , law , engineering
The purpose of this paper is to investigate the relative importance of internal (sector‐specific) and external (labour market) forces in sectoral wage formation in the Netherlands (1967–90). The results show that wages are largely determined by external forces, although internal forces are significant as well. The impact of the number of insiders, which plays a role in unemployment persistance, is not significant. Separate estimation results show that the impact of internal forces and of unemployment is weaker in the industrial sectors than in the service sectors. This casts doubt on the presumption that insider power increases the impact of internal forces on wage formation.