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Oxford Economic Papers 2000; 52:774-803
Copyright © 2000 Oxford Universty Press

Article

A wage curve for Australia?

S Kennedyz and J Borlandy

z Analytical Services, Australian Bureau of Statistics, Australia
y Department of Economics, University of Melbourne, Parkville 3052, Australia
Centre for Economic Policy Research, Australian National University, Australia

Abstract

This paper examines the wage curve in Australia. Regressions for weekly earnings are estimated on a pooled cross-section data set for 1982 to 1994/95. Using the preferred regression specification it is found that the elasticity of weekly earnings with respect to state-level rates of unemployment is -0.07 to -0.09. These findings are robust to a variety of modifications to the regression specification. A comparison of Australia, the US and UK is undertaken to examine how differences in wage-setting institutions between those countries might affect wage curve estimates.


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