Macro against sectoral wage equations for The Netherlands

Explaining Unemployment in Spain: Structural Change, Cyclical Fluctuations, and Labor Market Rigidities

“…They show that I/ Engle and Granger (1987). 2/ The model is similar to one estimated for the Netherlands by Graafland and Huizinga (1988). productivity is integrated of order two, capacity utilization and consumer prices are integrated of order one, and the wage is integrated of order zero .…”

Internal and External Forces in Sectoral Wage Formation: Evidence From the Netherlands

“…Since the absolute value of the parameters of the external variables, such as the replacement ratio and the unemployment rate, is rather small compared to that of the macro wage rate, this provides another indication that the effect of the macro wage on the sectoral wage only partly runs through the threat point of the employees. An alternative explanation for the strong influence of the macro gross wage on the sectoral gross wage is that wage leading and following patterns play a dominant role (Graafland and Verbruggen, 1993). bFor p, yn, and n the one-year and two-year lagged sectoral variables and the corresponding untagged macro variables are used as instruments, also two-year and three-year lagged sectoral wages are included as instruments.…”

“…Empirical evidence on the impact of internal factors in wage formation in the Netherlands is scarce. Graafland and Verbruggen (1993) estimate wage equations for 21 sectors. The estimation results show that wage formation in the Netherlands is dominated by macro-economic variables such as the consumer price and aggregate labour productivity.…”