Inflation and the Current Bargaining Climate With inflation rates high and recovery rates low, it should not be surprising that many unions are interested in improving their COLA clauses. The most common COLA formula calls for a wage-rate increase of one cent per hour for each 0.3 point change in the price index. Under such a formula it may be impossible to prevent erosions in real wages. Suppo...

This paper examines downward nominal wage rigidity in Korea using aggregate and individual-level data. We find that the degree of downward nominal wage rigidity differs depending on the data sources used. Results from the aggregate data indicate that, on average, wages have been flexible. By contrast, evidence from the micro data suggests that nominal wages are downwardly rigid most of the time...

Since late 2000s, economic growth has gained increasing attention, while economic development became the ultimate objective of the national policies. Recently regional income disparities rose as a critical factor of regional development policies, as people started to recognize relative poverty from the drastic national economic growth with huge income gap between social classes. Wilkinson and P...

We present a simple model to explain why wage inequality in the U.S. increased in the 1980s but decreased in the 1970s, in which we argue that educational investment might deteriorate wage inequality temporarily, but permanently decrease it. A country would not necessarily present the Kuznets inversed-U curve if having sufficient educational investment. Acceleration in the educational investmen...

We analyze the effect of the wage gap between regular and non-regular employment on a macroeconomy by using a Keynesian dynamic model. If the steady state equilibrium exhibits the stagnationist regime, the size of the reserve army effect affects the stability of the equilibrium. On the other hand, if the steady state equilibrium exhibits the exhilarationist regime, an increase in the wage gap d...

The value of travel time savings (VTTS) is the monetary value attached to save a determined amount of travel time. VTTS is also the most important benefit category aimed at justifying investments in transport infrastructures by public administrations. Hence VTTS played a significant role in various economic studies, both analytical and empirical (Zamparini & Reggiani, 2007). "It is difficult to...

An exhaustive empirical and theoretical study conducted by Blanchflower and Oswald (1994) found a new empirical regularity of the negative relationship between wages and regional unemployment, that is, the ‘wage curve.’ The curve is roughly described by – 0.1 of the elasticity of wages with respect to the local unemployment rate with human capital characteristics of individual workers controlle...

This paper proposes and analyzes a model of a “European economy” with three overlapping generations, redistributive social security, and public universities without tuition. Individuals differ ex ante. The effect of wage tax rate on occupational choice and the voting equilibrium of wage tax rate and educational investments are analyzed both under full certainty and with income risks facing the ...

This study analyzes real wage cyclicality for male full-time workers within employer-employee matches in Germany over the period 1984–2004. Five different wage measures are compared: the standard hourly wage rate; hourly wage earnings including overtime and bonus pay; the effective wage, which takes into account unpaid overtime; and monthly earnings, with and without additional pay. None of the...

This paper aims at answering the question: How does a typically European bargaining system |with collective bargaining, extension mechanisms and national minimum wage |coexist with low unemployment rate and high wage °exibility? A unique data set on workers, ̄rms and collective bargaining contracts in the Portuguese economy is used to analyze the determinants of both the bargained wage and the ...