• Journal of Labour Economics
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• v.24 no.3
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• pp.63-81
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• 2001

We focus on the relationship between the wage and the productivity in the Korean manufacturing industry over the period from the 1971 year to the 2000 year by using the Geweke's linear feedback method and the impulse response method. And we divide the whole period into the 1971-before the financial crisis and the 1971-2000 including the after the financial crisis to study the change of the relationship between the wage and the productivity after the financial crisis. The results are the followings; The productivity has the large influence on the wage positively, so that the improvement of the productivity boosts the wage and the vice versa in the before financial crisis period. It means that both the conventional wage setting theory and the alternative wage theory(efficiency wage and union theory) exist in the manufacturing industry. However, there exist only the conventional wage setting theory in the whole period.