The paper provides a review of empirical work on insider-outsider and duration effects in wage formation. It presents a theoretical model to investigate the relationship between previous employment and the wage rate. The impact of unemployment and long-term unemployment is considered. Empirical...

The purpose of this paper is to investigate the relative importance of internal (sector-specific) and external (labor market) forces in sectoral wage formation in the Netherlands (1967-90). The results show that wages are largely determined by external forces, although internal forces are...