Worker endowments and the effects of institutions on earnings realization:A cross-nation comparison

In this study we investigate how differential institutions, and their obser vance within regional labor markets, impact potential earnings realization. We investigate institutional linkages to labor market outcomes by means of cross-nation comparisons between the United States and the Netherlands. In this regard, better job-matching (information) programs, higher relative u nemployment benefits and minimum wages, and a greater prevalence of both tr ade unionism and collective bargaining likely work to the favor of Dutch wo rkers, and in turn augment their reservation wages during job search. The p redictable outcome of higher earnings realization among Dutch workers is te sted econometrically by frontier estimation.