Worker endowments and the effects of institutions of earnings realization: A cross-nation comparison

Abstract

In this study we investigate how differential institutions, and their observance within regional labor markets, impact potential earnings realization. We investigate institutional linkages to labor market outcomes by means of cross-nation comparisons between the United States and the Netherlands. In this regard, better job-matching (information) programs, higher relative unemployment benefits and minimum wages, and a greater prevalence of both trade unionism and collective bargaining likely work to the favor of Dutch workers, and in turn augment their reservation wages during job search. the predictable outcome of higher earnings realization among Dutch workers is tested econometrically by frontier estimation.