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The Impact of Incomes Policy on Aggregate Wage Determination in Australia *
Author(s) -
LEWIS PHILIP E.T.,
KIRBY MICHAEL G.
Publication year - 1987
Publication title -
economic record
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.365
H-Index - 42
eISSN - 1475-4932
pISSN - 0013-0249
DOI - 10.1111/j.1475-4932.1987.tb00647.x
Subject(s) - economics , wage , aggregate (composite) , real wages , labour economics , aggregate data , wage rate , medicine , materials science , pathology , composite material
A model of aggregate wage determination for Australia is developed and used to examine the effects of incomes policies on the level of real wages. A theoretical model of wage determination which includes several channels of incomes policy effects is specified and estimated using aggregate data. The results provide strong evidence to support the view that during periods of certain incomes policies there have been important changes in behaviour in the Australian labour market. In particular, during the period of the Prices and Incomes Accord it is estimated that equilibrium real wages were over 5 per cent below what would have been expected from previous experience .