Real Wage Adjustment and Employment Policies in the Nordic Countries

Wage formation and employment in a cointegrated VAR model

“…This implies that long-run wage formation can be described by the 'main course' theory. This is in contrast to Calmfors and Nymoen (1990) who conclude that the coefficient is less than unity for Denmark but is in line with the findings in Andersen and Risager (1990) who find support for long-run proportionality. The coefficient on output in the marginal productivity condition for labour, {ξ − (ξ − 1)/γ }, is also insignificantly different from unity, implying γ = 1, i.e.…”

Labour Market Structures, Labour Market Policy and Wage Formation in the OECD

“…Several Nordic economists (e.g. Calmfors and Nymoen, 1990;Holmlund, 1990;and Calmfors and Forslund, 1991), on the other hand, are highly sceptical' and suggest that active labour market policy programmes generate higher and more rigid wages because they reduce the employed's expected welfare loss in the event of a layoff. To determine which of these theoretical effects dominates is mainly an empirical matter.…”

New Deal for Young People: Towards an Ethical Employment Policy?

“…Lars Calmfors has argued, partly on theoretical grounds and partly on the basis of Scandinavian experience, that the guaranteed availability of programme places reduces the pressure on unions to exercise restraint in their wage demands, and that Ethical Basis of the New Deal for Young People 295 the more attractive the programme, the less the wage discipline exercised by unemployment (Calmfors & Nymoen, 1990;Calmfors & Lang, 1993;Calmfors, 1994). From an ef ciency viewpoint, the policy conclusion is to make programmes selective and/or not to make them too generous in their provisions.…”