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© 1997 Oxford University Press

research-article

AN APPLICATION OF WAGE BARGAINING MODELS TO NORWEGIAN PANEL DATA

FREDRIK WULFSBERG

Department of Economics, University of Oslo P.O. Box 1095, Blindern, N-0317 Oslo, Norway

Wage determination in Norwegian industry is investigated using a panel of over 7,000 firms over 17 years. A standard right-to-manage bargaining model serves as theoretical background for the empirical specification. Wage equations focusing on the relative importance of insider vs outsider variables are estimated, controlling for firm-specific fixed effects. Although outrider variables are more important, insider variables have a significant effect on wages. Estimated insider weight is less than for countries with less-centralised wage determination. Using regional unemployment data we estimate unemployment elasticity between –0.04 and –0.10. There is no strong evidence for real wage resistance in the long run.


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