Abstract
Using annual observations for 1960-89, a complete econometric model of the Israeli labour market is estimated in which the demand for labour varies inversely with real wages, participation varies directly with real wages and real wages are explained by a Phillips curve in which the natural rate of unemployment is a variable. The model suggests that while wages are far from flexible, unemployment shocks die away fairly rapidly. We were unable to model the behaviour of public sector pay and employment.
Original language | English |
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Pages (from-to) | 971-982 |
Number of pages | 12 |
Journal | Applied Economics |
Volume | 25 |
Issue number | 7 |
DOIs | |
State | Published - Jul 1993 |