Structural Models of the Wage Curve Estimated by Panel Data and Cross-Section Regressions

Gerba, Eddie and Pikoulakis, Emmanuel and Wisniewski, Tomasz Piotr (2014): Structural Models of the Wage Curve Estimated by Panel Data and Cross-Section Regressions.

Abstract

Introducing equilibrium unemployment to the solution of the intertemporal allocation of non-leisure time, we derive two wage-setting models which we estimate by panel data and cross-section regressions applied on aggregative data. The results support the empirical relation known as the wage-curve, thus enriching and strengthening the microfoundations of that relation.

• Item Type: MPRA Paper
• Language: English
• Keywords: Wage Curve, Intertemporal Allocation, Two-Sector Model
• Subjects: D - Microeconomics > D9 - Intertemporal Choice > D91 - Intertemporal Household Choice ; Life Cycle Models and Saving; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J22 - Time Allocation and Labor Supply; J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure ; Wage Differentials

References

Barro, R.J. and Lee, J.W. (2001) “International Data on Educational Attainment: Updates and Implications”. Oxford Economic Papers, Vol. 53 No 3, pp. 541-563.

Blanchflower, D.G. and Oswald, A.J. (2005) “The Wage Curve Reloaded”, IZA, DP. No. 1665.

Extended Penn World Tables: Version 4.0 assembled from Penn World Tables and other sources by Adalmir Marquetti. Available on: http://homepage.newschool.edu/~foleyd/epwt/

Greenwood, J. and Hercovitz, Z. (1991). " The Allocation of Capital and Time over the Business Cycle". Journal of Political Economy, Vol. 99 No. 6, pp. 1188-1214.

Heston,A., Summers, R., and Aten, B. (2011) Penn World Tables Versions 7.0, Center for International Comparison of Production, Income and Prices, at the University of Pennsylvania.

Martin, J.P., (1996). “Measures of Replacement Rates for the Purpose of International Comparisons: A Note”. OECD Economic Studies, No. 26, available at http://www.oecd.org./dataoecd/60/23/2502965.pdf

OECD (1994). The OECD Job Study: Evidence and Explanations, Paris.

Pikoulakis, E.V. and Wisniewski, T.P. (2009). “ The Allocation of Non-Leisure Time and the Price of Capital: A Model Applied Empirically to the Wage Curve”, SSRN –id 1249429.

Schoellman , T., (2012) “ Education Quality and Development Accounting” Review of Economic Studies, January 2012, Vol. 79(1), 388-417.