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Efficiency wages, bargaining power, and wage gaps.



Efficiency Wages, Bargaining Power, and Wage Gaps 2002 Ralph Olthoff All rights reserved. No part of this publication may be reproduced in any form by any electronic or mechanical means (including photocopying, recording, or information storage and retrieval) without permission in writing from the author. ISBN 90-9016-543-6 Printed and bound in the Netherlands by Datawyse, Maastricht Efficiency Wages, Bargaining Power, and Wage Gaps PROEFSCHRIFT ter verkrijging van de graad van doctor aan de Universiteit Maastricht, op gezag van de Rector MagniHcus, Prof. Dr. A.C. Nicuwcnhuijzon Krusc-inan, volgens het besluit van het College van Decanen, in het openbaar te verdedigen op vrijdag 17 januari 2003 om 16.00 uur door Ralph Olthoff Promotor: Prof. dr. P. P. de Gijsel Beoordelingscommissie: Prof. dr. J. Muysken (voorzitter) Prof. dr. dr. F. Haslinger (Universitat Hannover) :• Dr. A. P. van Veen , For Christine Contents Preface XV Acknowledgements xv Introduction 1 1.1 Motivation 1 1.2 Outline 4 Wage gaps and wage drift in the Netherlands and Germany 7 2.1 Introduction 7 2.2 Definitions and measurement problems 9 2.3 The situation in the Netherlands 11 2.3.1 Labour-market institution 11 2.3.2 Wage drift 13 2.4 The situation in Germany 17 2.4.1 German labour relations 17 2.4.2 Wage drift 20 2.4.3 Wage gaps 23 2.5 Conclusions 26 2.A Appendix: List of abbreviations 29 2.A.1 Netherlands 29 2.A.2 Germany 29 Theories of the wage gap and wage drift: a survey 31 3.1 Introduction 31 3.2 A short overview 31 3.3 Market determined wages and wage gaps 35 3.3.1 The Phillips-curve theory—wage drift on a neoclassical labour market 35 3.3.2 The contract wage as an information variable on the labour market 38 3.3.3 Adaptation versus mark-up hypotheses of wage drift 44 3.4 Efficiency-wage theories and wage drift 45 3.4.1 Models of efficiency wages and the influence of the contract wage 45 3.4.2 Primary and secondary drift and the stability

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