Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/20557
Year of Publication: 
2004
Series/Report no.: 
IZA Discussion Papers No. 1291
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
In this paper we investigate the importance of labor market institutions such as unemployment insurance, unions, firing regulation and minimum wages for the evolution of wage inequality across countries. We derive a simple log-linear equation of the wage differential as a function of the institutional parameters, total factor productivity, final good prices and relative skill supply. Our estimates for 11 OECD countries imply that labor market institutions can account for a large part of the change of wage inequality across countries after controlling for time and country effects.
Subjects: 
labor market institutions
wage differential by skill
bilateral monopoly
country panel data
JEL: 
E24
J65
J51
J31
Document Type: 
Working Paper

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