"This article, which serves as the introduction to the special issue focusing on 'wages and employment', deals with the key developments of the past 25 years in this area of research. First, the latest insights and findings of macro- and microeconomic theory as well as of empirical knowledge on the explanation and quantification of the relationship between wage level, wage structure and employment as well as of employment structure are the centre of attention, with the relevant progress in econometry also being acknowledged. Then, the importance of wage rigidities is dealt with, which are significant both from a macro- and a microeconomic point of view, and which have been at the centre of scientific and economic-policy discussions particularly in recent years. Finally, wage-policy conclusions are examined briefly. What becomes obvious is that a negative relationship between wages and employment can be detected far more clearly nowadays than a quarter of a century ago. This is equally true on the basis of theoretical and empirical analysis with a micro- and macroeconomic background, even if, when based on disequilibrium models, for the latter no positive employment effects due to reductions in real wages can be expected in times of recession." (author's abstract, IAB-Doku) ((en))
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.