We use plant-level employer-employee data in production functions and wage equations to examine whether wages are based on productivity. We use a stepwise procedure to find out how the results are influenced by the kind of data that is available. The models include shares of employee groups...

Rational expectations of the errors-in-variables type and expectations series quantified from qualitative business survey data are compared in the estimation of a dynamic labor-demand model for the Finnish manufacturing. Replacing future expected values of variables by realizations creates a...