Labor Market Institutions and Wage Inequality
Journal
ILR review
ISSN
0019-7939
ISSN-Digital
2162-271X
Type
journal article
Date Issued
2007-04-01
Author(s)
Abstract
The authors investigate how labor market institutions such as unemployment insurance, unions, firing regulations, and minimum wages have affected the evolution of wage inequality among male workers. Results of estimations using data on institutions in eleven OECD countries indicate that changes in labor market institutions can account for much of the change in wage inequality between 1973 and 1998. Factors found to have been negatively associated with male wage inequality are union density, the strictness of employment protection law, unemployment benefit duration, unemployment benefit generosity, and the size of the minimum wage. Over the 26-year period, institutional changes were associated with a 23% reduction in male wage inequality in France, where minimum wages increased and employment protection became stricter, but with an increase of up to 11% in the United States and United Kingdom, where unions became less powerful and (in the United States) minimum wages fell.
Language
English
Keywords
Labor Market Institutions
Wage Differentials
HSG Classification
contribution to scientific community
HSG Profile Area
SEPS - Economic Policy
Refereed
Yes
Publisher
Sage Publications
Volume
60
Number
3
Start page
340
End page
356
Pages
17
Subject(s)
Eprints ID
235069