Union wage setting and unemployment in the Netherlands (1965–1987)

Lever, Marcel

doi:10.1080/00036849100000122

Cited by 7 publications

(8 citation statements)

References 15 publications

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“…This result confirms the findings by Kuipers and Kuper (1991) for the Netherlands, and by Madsen (1994) for the UK. It is however in strong contrast to the results obtained by Bean et al (1986) and Lever (1991) for the a Demographic variables include the change in working-age population corrected for the number of people living on early-retirement and disability benefits, and the change in the worker ± labour year ratio (part-time work).…”

Section: Accounting For Unemployment Growthcontrasting

confidence: 50%

Explaining unemployment trends in the Netherlands

Dur

2001

Journal of Policy Modeling

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In this paper, a small macroeconomic model of the Dutch labour market is estimated. The model is used to detect the causes of the rise in unemployment since the early 70s. In contrast to existing empirical work, we treat labour supply as an endogenous variable. This adjustment appears to have serious consequences for the conclusions drawn. In particular, we show that the detrimental effect of the replacement rate on unemployment has been overestimated in earlier studies. Furthermore, we include contractual working time in the analysis. Our estimates imply that work sharing does reduce unemployment, but at a high cost. Because hourly wages rise in response to reduced working hours, aggregate output is damaged quite strongly. D

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Section: Accounting For Unemployment Growthcontrasting

confidence: 50%

Explaining unemployment trends in the Netherlands

Dur

2001

Journal of Policy Modeling

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“…Maybe that is the reason it is not recognised by Lever (1991) who derives a model along the lines 10 sketched here, but without further arguments then superimposes a different impact of employers' and employees' taxes.…”

Section: A Right-to-manage Model Of Wage Bargainingmentioning

confidence: 92%

“…The increase in the value from the short-term to the long-term is consistent with the conjecture of Blinder that we have discussed in the introduction. Graafland (1990) Lever (1991) also estimates a bilateral monopoly model. He finds an elasticity for employers' premiums equal to 1.0, whereas the elasticity for employees' premiums (0.28) is not significant from 0.…”

Section: Earlier Research For the Netherlandsmentioning

confidence: 99%

It Does Matter Which Side of the Labour Market is Taxed

Muysken¹,

Veen²

1996

Essays on Money, Banking, and Regulation

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In this paper we discuss the influence of tax shifting on wages and employment. The paper is related to earlier research in this field, both for the Netherlands and for other European welfare states. Our approach differs since we pay explicit attention to the well-known theoretical result that it does not matter which side of the market is taxed (Dalton's Law). We will analyse the mechanisms behind tax shifting. Further we want to analyse whether a shift from employers' to employees' burden has an influence on wages and employment.The paper discusses the influence of taxes on wages and employment in various bargaining settings: the perfect competition model, right-to-manage models (including that of bilateral monopoly) and efficiency wage models are analysed. We conclude that the results depend on the framework that is used in the description of wage setting behaviour. The theorem that it is irrelevant which side of the market is taxed, does not hold for right-to-manage and efficiency wage models.In estimations for the Netherlands, the elasticity of wage costs with respect to employers' taxes is usually found to lie around 0.9, whereas the elasticity with respect to employees' taxes usually is found to lie around 0.4. This apparent violation of Dalton's Law has never been explained before. However, it can be explained from our analysis. Moreover, we show the importance of this result for the impact of a recent tax reform in the Netherlands on wages. 3rd June 1996We would like to thank Lex Borghans for his stimulating comments on an earlier version of this * paper. Further we are grateful to Egbert Jongen for his computational assistance. We thank the Netherlands Association of Science (NWO) for their financial support to this research.

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“…Thirdly, a limited effect of long-term unemployment on wage determination provides evidence in favour of insider-outsider theory or duration theory. It is an insider-outsider effect if the union cares more about employed and short-term unemployed than about long-term unemployed; see Graafland (1992) and Lever (1991). It is a duration effect if it results from a reduction of search intensity by long-term unemployed workers or from an increase of training costs during long-term unemployment.…”

Section: V Transition To Empirical Workmentioning

confidence: 99%

“…Then the rate started to diminish to some 8 per cent now. The increase of unemployment in the late 1970s and early 80s may be attributed to higher oil prices (Bruno and Sachs, 1985) and to real wage increases in response to increases of taxes and benefits and a widening gap between consumer prices and producer prices (Layard and Nickell, 1985,1986Bean et al, 1986;Lever, 1991). In the late 1980s oil prices fell and taxes and benefits were reduced, at least in the Netherlands, but unemployment does not decrease as fast as predicted by…”

Section: Introductionmentioning

confidence: 99%

Insider‐outsider Effects in Wage Formation: An Empirical Survey*

Lever¹

1995

Bulletin of Econ Res

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The paper provides a review of empirical work on insider-outsider and duration effects in wage formation. It presents a theoretical model to investigate the relationship between previous employment and the wage rate. The impact of unemployment and long-term unemployment is considered. Empirical results show that the effect of previous employment on the wage rate is generally insignificant. Both short-term and long-term unemployment appear to have a significant negative impact. Micro-studies reveal that both firmspecific and aggregate variables play a role in wage determination.

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Union wage setting and unemployment in the Netherlands (1965–1987)

Cited by 7 publications

References 15 publications

Explaining unemployment trends in the Netherlands

Explaining unemployment trends in the Netherlands

It Does Matter Which Side of the Labour Market is Taxed

Insider‐outsider Effects in Wage Formation: An Empirical Survey*

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