Wages and Politics: Evidence from the Norwegian Public Sector

摘要

The paper presents empirical results for wage setting inthe Norwegian local and central public sector. Our results imply that central and local government wages are completely utonomous processes both inthe short-run and in the long-run. This suggests that the formal strong coordination of wage setting in the two sectors at the national level does not determine the final outcome. We find that a stronger central government will reduce wages inthe local government sector. The evidence also suggests an electoral cycle in the local but not in the central government sector.