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Labour market expectations and especially wage expectations are important determinants for individual schooling decisions. However, research on individual expectations of students is scarce. The paper presents the Swiss results of a survey that was conducted in ten European countries. Its main findings are that point estimates of wages after graduation are close to actual wages, whereas the expectations of the wage gain in the first ten years of professional experience exceed the actual wage gains significantly. We find that rates of return to education that are calculated on the basis of individual wage and cost expectations as well as individual time preferences can be explained partially by the seniority of students, the self‐perception of their academic performance and their subjective job perspectives.

The purpose of this paper is to explore the ability of monetary policy to generate real effects in laboratory general equilibrium production economies.

To understand why monetary policy is not consistently effective at stabilizing economic activity, the author vary the types of agents interacting in the economy and consider treatments where subjects are playing the role of households (firms) in an economy where automated firms (households) are programmed to behave rationally.

While the majority of participants’ expectations respond to monetary policy in the direction intended, subjects do form expectations adaptively, relying heavily on past variables and forecasts in forming two-steps-ahead forecasts. Moreover, in the presence of counterparts that are boundedly rational, forecast accuracy worsens significantly. When interacting with automated households, updating firms’ prices respond modestly to monetary policy and significantly to anticipated marginal costs and future prices. The greatest deviations in behavior from theoretical predictions arise from human households (HH). Households persistent oversupply of labor and under-consumption is attributed to precautionary saving and debt aversion. The results provide evidence that the effects of monetary policy on decision making hinge on the distribution of indebtedness of households.

The author present causal evidence of the effects of potential bounded rationality on agents’ consumption and labor decisions.

Incorrect inflationary expectations affect the unemployment rate, hence the question of how expectations are formed is crucial. Examines two hypotheses which have dominated the discussion: the adaptive (AEH) and the rational expectations hypothesis (REH). During the 1980s it was assumed that REH was to be preferred to AEH, but various problems with REH have emerged. Focuses on two of these problems: whether participants in the labour market have the requisite information; and the presence of multiple RE equilibria. It may therefore be necessary for agents to co‐ordinate their expectations. Suggests that institutions of the labour market might hold the key to this question of co‐ordination.

This paper aims to build on existing studies on the relationship between individual wages, age and experience, and provide new evidence on the determinants of wages in Italy.

Wage‐age profiles, which include cohort variables to capture generational differences in wages and are characterised by a changing‐over‐time structure, are estimated by fixed and random effects panel regressions. The analysis exploits a longitudinal dataset of administrative data on wages for the period 1985‐1999.

This paper shows that wage to age profiles for different cohorts of workers are not stable over time: although younger generations of Italian workers are benefiting from higher starting wages than older generations, they face the prospect of lower growth of future earnings. It also confirms the existence of a significant supply effect: the bigger the cohort relative to the active population, the smaller the cohort's gain in terms of wage levels. Finally, it captures the dependence of individual wages on aggregate labour market conditions: individual wages are shown to be negatively related to the unemployment rate and positively related to the union wage index.

Although the paper does not propose a novel theoretical approach to individual wage analysis, it demonstrates the benefits of a more integrated empirical analysis of individual wages.

The empirical findings suggest that it would be possible and useful to integrate the changing age profiles of individual wages with the estimation and projections of Italian aggregate industry and service sector average wages.

The paper provides new evidence on the determinants of the dynamics of individual wages through the estimation of time‐varying wage to age profiles of workers in the Italian industry and service sectors.

The purpose of this paper is to study gender differences in wage bargaining by comparing the unexplained wage gap in desired, realised and reservation wages.

The notion of desired wages is applied, which shows workers’ first bet to potential employers during the job-search process. A large job-search data set is drawn from the main Estonian electronic job-search site CV Keskus.

It is found that the unexplained gender wage gap is around 20 per cent in desired wages and in realised wages, which supports the view that the gender income gap in expectations compares well with the realised income gap. The unexplained gender wage gap is larger in desired wages than in reservation wages for unemployed individuals, and this suggests that women ask for wages that are closer to their reservation wages men do. Occupational and sectoral mobility is unable to explain a significant additional part of the gender wage gap.

The paper adds to the scarce empirical evidence on the role of the non-experimental wage negotiation process in the gender wage gap. In addition, the authors seek to explain one of the largest unexplained gender wage gaps in Europe, the one in Estonia, by introducing a novel set of variables for occupational and sectoral mobility from a lengthy retrospective panel.

It is commonly believed that trade unions act irrationally in collective bargaining either by “picking numbers out of the air” or by forming biased forecasts of information. Such views either imply that information disclosure to unions is useless or that discretionary disclosure could confer an advantage on management. This article presents an alternative model of unions which relies on expectations being formed rationally and based on the optimal use of information.

This paper examines the hypotheses that the length and the depth of the Great Depression were a result of sticky prices or sticky nominal wages using panel data for industrialized and semi-industrialized countries. The results show that price stickiness, particularly, and wage stickiness were key propagating factors during the first years of the Depression. It is found that prices adjusted slowly to wages, particularly in manufacturing. Manufacturing wages are also found to adjust relatively slowly to innovations in prices, but unemployment exerted strong downward pressure on wage growth.

The uncompromising preference of citizens for public sector employment throughout the Middle East is not new. However, with the recent saturation of the public sector job market and demographic pressures, it has grown to become a problem of unpredictable economic and social consequences. This paper aims to explore the factors determining career choice behaviour and the underlying career expectations and perceptions of young citizens in one Middle Eastern country, the United Arab Emirates (UAE), where the preference for public sector employment is not only very strong, but is also perceived as increasingly problematic.

Semi‐structured interviews were conducted with a total of 60 UAE citizens in the age group of 18‐23.

The authors explore and discuss cognitive, social, and institutional factors that influence the job‐seeking behaviour of young Emiratis and lead to negative attitudes towards the private sector. They further suggest potential causes of the very low private sector employment levels among UAE citizens and discuss their implications for policy makers. The authors argue for two main approaches: first, a focus on training and orientation of young citizens to enable them to confidently pursue job opportunities in the private sector. This may also include ways for providing young UAE citizens with private sector exposure, as 98 per cent of the national workforce is currently working in the public sector and a lot of what young UAE citizens think they know about the private sector is not founded in reality. Second, interventions to address structural and institutional challenges hindering employment of citizens including gaps in employment conditions and remuneration levels for citizens between the public and private employment sectors.

While much previous research in this field has focused on the perceptions of employers, this is the first paper to actually explore the perceptions of those at the centre of the discussion – young UAE citizens themselves.