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The article clarifies the wage–employment relation in a developing country. Several years ago, many articles in the United States indicated that the relation between increasing wages and increasing unemployment is unclear. These articles from the United States are insufficient to be applicable to all countries, especially developing countries such as Colombia where institutions and the wage–employment relation differ from those in the United States.

A meta-analysis methodology was used as 28 estimates of long-run wage–employment elasticity in Colombia from 1998 to 2016 were analyzed.

This article provides insights into how real wages affect employment. Despite publication biases, results showed that a 1% increase in wages results in a 0.11% decline in employment in the long run.

Due to the publication bias, it is not considered how variables such as sectors, estimation strategies (panel data, partial adjustment, cointegration and non-linear least squares, among others), formal/informal urban sectors, government services and transportation, and qualified and unskilled workers affect the true elasticity value.

This paper includes implications for public policy because the results are important to minimum wages policy in a developing country.

There are no studies regarding the wage–employment relation in a developing country. The empirical results obtained in this article are useful for regulators, policy makers and researchers to understand whether employment is affected by real wages.

Examines the employment effects of minimum wage regulation on Greek manufacturing for the period 1962‐87. The empirical analysis is carried out in three steps. First, estimates the effect of the minimum wage on the average wages of adult male and female industrial workers to derive estimates of wage elasticities of each type of labour with respect to the minimum wage. Second, estimates labour demand equations for the two types of labour to derive the employment elasticities with respect to the corresponding average wage. Finally, provides estimates on the employment effects of the minimum wage by combining the results derived in the first two stages. The results provide some indications that the minimum wage plays a more significant role in the employment of female than male workers in manufacturing, and suggest that minimum wages positively affect the average real wage of both types of workers examined.

This study explores the impact of import competition on wages and employment at the industry level. We estimate reduced‐form, industry‐level wage and employment equations. We find that, in a majority of industries, a toughening of import competition tends to reduce employment and to have an adverse effect on workers’ wages, but the magnitude of this impact is relatively modest. Our results suggest that import price variations have had very little influence on the domestic labour market.

Legal minimum wage rates for young workers were introduced in The Netherlands in 1974. After substantial increases during the 1970s, youth minimum wages were lowered in the 1980s, in response to the large increase of youth unemployment. Analyses the employment effects of lowering youth minimum wages. Looks at macro and micro evidence. At the macro level, does not find convincing evidence of negative effects of youth minimum wages on youth employment. Constructs a micro model in which an individual′s labour market state can be affected by the sign of potential earnings minus the relevant minimum wage. The model is estimated with data from 1984 and 1987. Finds significant minimum wage elasticities of employment and unemployment, with expected signs.

High rates of youth unemployment, worldwide, have led governments to advocate a range of policies designed to increase job offers to young workers. For example, the Australian Government is currently introducing a system of “training wages” which will see effective youth wages set well below adult award wages for a designated training period. This policy is designed to simultaneously increase the human capital of young workers as well as help to overcome the initial barriers to entry into the labour market. However, youth‐specific wages have been criticized on the basis of age discrimination and on equity grounds. Also, some US data question the employment‐boosting potential of reduced minimum youth wages. In this paper recent international findings on the relationship between youth wages and employment are presented and compared with empirical tests of the relationship using labour market data for Australia as a whole as well as the State of Queensland. The results are used to examine the likely impact of the introduction of the training wage on the youth labour market in Australia and to provide further generalizations on the wider issue of employment and youth‐specific wages.

Over the past decade, Allan Cartter's model of the utility maximizing union and the institutional principles upon which it is based have provided the basis for much of the neoclassical study of union behavior. The most fundamental component of Cartter's model is the union's utility function, which is defined over the wage level and the level of employment. As drawn by Cartter, this utility function expresses two specific hypotheses: (1) The elasticity of substitution between the two arguments will be small; (2) The utility function defines a wage‐preference path that is kinked at the current wage level (Cartter, 1959, p. 90–91).

This paper aims to theoretically find out whether investments could close the formal-informal wage gap in India.

The paper builds a general equilibrium model of a developing economy with a large informal sector and a capital-intensive formal sector with sector-specific capital and incorporates endogenous demand.

With homothetic preferences, a small initial wage premium and elastic relative demand, investment in the formal sector is likely to close the wage gap, but the gap persists with non-homothetic preferences. However, investment in the informal sector is unlikely to close the wage gap with either type of preferences.

Though labour market distortions in developing economies leading to a formal-informal wage gap are well-documented in the development literature, little attention has been given to the question of whether such a gap would close over time.

Governments in a number of countries have introduced policies to increase the labour force participation of persons with disabilities. Many of these policies have displayed a legislative or compulsory element as in the case of workforce quotas. In 1981 the Australian Government introduced a price strategy in which employers were induced to increase their job offers to the disabled through a system of wage subsidy and workplace modification schemes. The performance of these schemes became an interesting test of the general policy of using market variables to influence what many regard as essentially a social problem. The results achieved in this article indicate that the wage subsidy programme has not been effective nor, given current employer attitudes, is it likely to be in the future.

The purpose of this paper is to theoretically investigate the impact of wage pacts on economic growth.

This paper presents an innovation driven endogenous growth model, where firms and unions bargain over wages.

Finds that the degree of centralization of the bargaining structure plays a crucial rule for economic performance. Central bargaining, which incorporates the leapfrogging externality incorporated in firm‐level bargaining, will yield lower rates of unemployment for a given rate of economic growth. The increase in labor resources will in turn also yield faster growth rates in a corporatist economy. Indeed, when unions focus on issues other than short term wage increases, they may even outperform the non‐unionized economy, as they can internalize the knowledge externality through long‐term wage moderation pacts.

The paper is theoretical with some anecdotal evidence, and lacks thorough empirical testing.

There are strong implications for economic policy, suggesting the promotion of wage pacts. Before implementation, prior empirical conformation of the results is required.

This is the first paper that demonstrates under which conditions unions can promote economic growth and reduce unemployment through long‐term wage pacts.