REGIONAL WAGE CURVES EMPIRICAL EVIDENCE FROM
The papers studies wage formation using panel data for a large
sample of Norwegian municipalities covering the time period 19701992.
The main conclusions are the following. Regional manufacturing wages are
negatively related to regional unemployment, but the effects of open as
well as total regional unemployment are small. We find a numerically important
wage dampening effect of labour market programs. However, we can not reject
the null that only total unemployment matters. Finally, manufacturing
profitability is important in shaping regional manufacturing wages and
reduced regional payroll taxes are almost fully transmitted into reduced
regional wage costs.