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Wage Rigidities in Western Germany: Microeconometric Evidence from the 1990s

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  • Puhani, Patrick A

Abstract

This Paper investigates whether and in what sense the west German wage structure has been ‘rigid’ in the 1990s. To test the hypothesis that a rigid wage structure has been responsible for rising low-skilled unemployment, I propose a methodology that makes less restrictive identifying assumptions than some previous related work. I find that market forces justified the relative stability of educational wage premia. Relative wages did not, however, respond to negative net demand shocks for young workers and white-collar workers.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3009.

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Date of creation: Oct 2001
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Handle: RePEc:cpr:ceprdp:3009

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Keywords: Germany; identification; rigidities; unemployment; wages;

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