By using panel data, the paper aims to (1) describe changes in the income of households and to (2) present an econometric model for explaining short-term changes in income. The data are derived from the income distribution statistics compiled by the Central Statistical Office of Finland. The...

The paper explores wage flexibility in Finland. The study covers the private sector workers by using three data sets from the payroll records of employers’ associations. The data span the period 1985–2001. The results reveal that there has been macroeconomic flexibility in the labour market....