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Wage persistence and labour market institutions: an analysis of young European workers

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  • A. G. Menezes
  • D. Sciulli
  • J. C. Vieira

Abstract

This article investigates the effects of Labour Market Institutions (LMIs) on wage persistence among young European workers at the beginning of their careers. We use European Community Household Panel (ECHP) data from 1995 to 2001 for 13 EU countries and estimate a three-level random intercept probit model that allows for unobserved heterogeneity both at the individual and country level. Overall, we find that LMIs explain wage persistence. In particular, we find a high level of Employment Protection Legislation (EPL) and a high level of Bargaining Centralization (BC) increase wage persistence.

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File URL: http://www.informaworld.com/openurl?genre=article&doi=10.1080/13504851.2010.505554&magic=repec&7C&7C8674ECAB8BB840C6AD35DC6213A474B5
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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Applied Economics Letters.

Volume (Year): 18 (2011)
Issue (Month): 9 ()
Pages: 823-828

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Handle: RePEc:taf:apeclt:v:18:y:2011:i:9:p:823-828

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  1. Moshe Buchinsky & Jennifer Hunt, 1999. "Wage Mobility In The United States," The Review of Economics and Statistics, MIT Press, vol. 81(3), pages 351-368, August.
  2. Aaberge, Rolf, et al, 2002. "Income Inequality and Income Mobility in the Scandinavian Countries Compared to the United States," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 48(4), pages 443-69, December.
  3. José Cabral Vieira, 2005. "Low-wage mobility in the Portuguese labour market," Portuguese Economic Journal, Springer, vol. 4(1), pages 1-14, 04.
  4. Franco Peracchi, 2002. "The European Community Household Panel: A review," Empirical Economics, Springer, vol. 27(1), pages 63-90.
  5. Parker, Simon C. & Gardner, Sam, 2002. "International income mobility," Economics Letters, Elsevier, vol. 76(2), pages 179-187, July.
  6. Rabe-Hesketh, Sophia & Skrondal, Anders & Pickles, Andrew, 2005. "Maximum likelihood estimation of limited and discrete dependent variable models with nested random effects," Journal of Econometrics, Elsevier, vol. 128(2), pages 301-323, October.
  7. Sophia Rabe-Hesketh & Anders Skrondal & Andrew Pickles, 2004. "GLLAMM Manual," U.C. Berkeley Division of Biostatistics Working Paper Series 1160, Berkeley Electronic Press.
  8. Cardoso, Ana Rute, 2006. "Wage mobility: do institutions make a difference?," Labour Economics, Elsevier, vol. 13(3), pages 387-404, June.
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