WAGE DETERMINATION IN THE UK - FURTHER EMPIRICAL RESULTS USING COINTEGRATION

The present paper examines the long-run behaviour of two types of wage models for the UK over the period 1966:1-1989:2. These models, differ ing in their theoretical construction, are estimated and explored usin g various tests for cointegration. The Hall (1986,1989) model is based on Sargan's (1964) wage specification, while the Arestis and Skott (1 993) and Arestis and Biefang-Frisancho Mariscal (1993) model is concer ned with distributional and wage efficiency theoretical effects. Both models exhibit at least one economically sensible long-run relationshi p for wage determination with significant and correctly signed paramet ers and show expected proportionality between wages and productivity. Further, the Arestis and Skott (1993) model shows the effects of effic iency wage elements on effort.