Wage Rigidities in Western Germany? Microeconometric Evidence from the 1990s
Type
discussion paper
Date Issued
2001-01-01
Author(s)
Abstract
Diskussionspapier 2001-10, Volkswirtschaftliche Abteilung, Universität St. Gallen, IZA Discussion Paper No. 334, Bonn, ZEW Discussion Paper No. 01-36, Mannheim#### not available in German This paper investigates whether and in which sense the west German wage structure has been 'rigid' in the 1990s. A 'strong wage rigidity dynamic' ('wage push') is defined as a rising wage rate and a rising unemployment rate in a labour market. A 'weak wage rigidity dynamic in a decreasing market' is defined as a constant wage rate and a rising unemployment rate in a labour market. The analysis further distinguishes between rigidities related to average wage developments and those related to the wage structure. In order to test the popular hypothesis that rising unemployment rates in Europe are related to rigidities of the wage structure (Krugman 1994), I propose a methodology which makes less restrictive identifying assumptions than some previous studies about changes in labour demand and labour supply. Different dimensions of skill are distinguished, like age (experience), education, occupation, and other labour market characteristics which may make labour heterogeneous. Download Discussion Paper: (pdf, 274 kb)
Funding(s)
Language
English
Keywords
identification
HSG Classification
contribution to scientific community
Refereed
No
Subject(s)
Division(s)
Eprints ID
16093
File(s)![Thumbnail Image]()
open.access
Name
wagerigi.pdf
Size
273.52 KB
Format
Adobe PDF
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