AN APPLICATION OF WAGE BARGAINING MODELS TO NORWEGIAN PANEL-DATA

Wage determination in Norwegian industry is investigated using a panel of over 7,000 firms over 17 years. A standard right-to-manage bargain ing model serves as theoretical background for the empirical specifica tion. Wage equations focusing on the relative importance of insider vs outsider variables are estimated, controlling for firm-specific fixed effects. Although outsider variables are more important, insider vari ables have a significant effect on wages. Estimated insider weight is less than for countries with less-centralised wage determination. Usin g regional unemployment data we estimate unemployment elasticity betwe en -0.04 and -0.10. There is no strong evidence for real wage resistan ce in the long run.