The wage curve: convexity, kinks and composition effects
A detailed analysis is provided of the shape of the wage curve using annual time series for Norwegian manufacturing. The main results are summarized as follows. Unemployment affects wages significantly, and we provide evidence in favour of a monotonically decreasing but highly non-linear wage curve. The long-term unemployed exert less of a wage dampening effect than do recently laid off workers, and real wage responsiveness to unemployment seems also to be stronger with higher inflation.