Wage Bargaining and the (Dynamic) Mincer Equation

16 Pages Posted: 25 Nov 2008

See all articles by Corrado Andini

Corrado Andini

IZA Institute of Labor Economics

Abstract

This paper shows that, if observed earnings are the result of employer-employee wage bargaining, under a set of specific assumptions, the standard static Mincer equation can be thought as a particular case of a dynamic wage equation. Particularly, we argue that the standard static Mincer equation is implicitly based on the hypothesis that the employee has full bargaining power, and provide (further) empirical evidence against this hypothesis.

Keywords: Mincer equation, return to schooling, wage bargaining

JEL Classification: I21, J31

Suggested Citation

Andini, Corrado, Wage Bargaining and the (Dynamic) Mincer Equation. IZA Discussion Paper No. 3822. Available at SSRN: https://ssrn.com/abstract=1305806 or http://dx.doi.org/10.1111/j.0042-7092.2007.00700.x

Corrado Andini (Contact Author)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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