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Changes in Wage and Unemployment Structures
Type
applied research project
Start Date
01 January 1999
End Date
30 December 2004
Status
completed
Description
The research project intends to in-vestigate to what degree wage rigidities (in the sense of ‘too high wages') can be held responsible for the rising unemployment rates, especially for unskilled workers. Differences in the unemployment experiences between the United States on the one hand and many European countries on the other, have established the well-known hypothesis that rigidi-ties in European labour market institutions are responsible for Europe's poor employment performance.
The analysis is distinguished by its microeconometric nature, i.e. data sets of individuals are used. In contrast to the existing literature, the methodological approach proposed consists of a systematic comparison of wage and unemployment movements in subsections (e.g. defined on skill groups or regions) of the labour market of a specific economy. So far, results for Western Germany and Poland are available. In Western Germany (1992-1998) young workers experienced - ceteris paribus - a decrease in relative demand. However, the relative wage position of this group did not change significantly, which suggests a "relative wage rigidity' for young labour. In Poland (1994-1998) a "relative wage rigidity' could not be found for young workers, but for low educated labour.
At the moment, the Swiss labour market is investigated. Studies for other countries are planned. The aim of the international comparison is to find out whether countries with less regulated labour markets exhibit less rigid wage behaviour than those with a strong influence of unions or government regulations.
The analysis is distinguished by its microeconometric nature, i.e. data sets of individuals are used. In contrast to the existing literature, the methodological approach proposed consists of a systematic comparison of wage and unemployment movements in subsections (e.g. defined on skill groups or regions) of the labour market of a specific economy. So far, results for Western Germany and Poland are available. In Western Germany (1992-1998) young workers experienced - ceteris paribus - a decrease in relative demand. However, the relative wage position of this group did not change significantly, which suggests a "relative wage rigidity' for young labour. In Poland (1994-1998) a "relative wage rigidity' could not be found for young workers, but for low educated labour.
At the moment, the Swiss labour market is investigated. Studies for other countries are planned. The aim of the international comparison is to find out whether countries with less regulated labour markets exhibit less rigid wage behaviour than those with a strong influence of unions or government regulations.
Leader contributor(s)
Partner(s)
Part of this research is carried out in co-operation with the Centre for European Economic Research (ZEW), Mannheim in an EU Commission Phare ACE Programme under the project P97-8055-R ‘Labour Market Flexibility in the Wake of EU Accession - Poland Compar
The content of publications within this project is the sole responsibility of the author and it in no way represents the views of the Commission or its services.
Funder(s)
Division(s)
Eprints ID
19475