Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/212169
Authors: 
Kilponen, Juha
Santavirta, Torsten
Year of Publication: 
2010
Series/Report no.: 
Bank of Finland Research Discussion Papers No. 12/2010
Abstract: 
We improve the precision of the test of the implicit contract model that Beaudry and DiNardo proposed twenty years ago. Our data set allows us to define the precise industry and plant of a particular employment relationship, link local labour market characteristics and company characteristics to the individual level of wages, and control for composition effects. We find evidence in favour of the spot market model of wage setting in the whole sample, but there is significant variation across industries and educational levels. In particular, the spot market matters most for low-skill workers, while the implicit contract model with one-sided limited commitment applies better to high-skill workers
Persistent Identifier of the first edition: 
ISBN: 
978-952-462-601-9
Document Type: 
Working Paper

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