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Wage compression and employment in Europe: First evidence from the structure of earnings survey 2002

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  • Gilles Mourre

Abstract

This paper aims at examining wage compression in Europe using the publicly available data on wages drawn from the Structure of Earnings Survey 2002. By wage compression, it is meant here that the difference in productivity across workers or firms is only partly reflected by the difference in wages. The paper specifically considers the existence of wage compression both across occupations and levels of education by means of cross-sectional econometric analysis. Looking at wage compression across occupations, robust evidence gives some support to the conventional view that there is a compressed wage distribution in Europe. Wage compression mainly occurs in continental and southern countries, whilst no compression is detected in Anglo-Saxon countries and mixed evidence is found in Northern European countries.

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File URL: http://ec.europa.eu/economy_finance/publications/publication606_en.pdf
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Bibliographic Info

Paper provided by Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission in its series European Economy - Economic Papers with number 232.

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Length: 35 pages
Date of creation: Sep 2005
Date of revision:
Handle: RePEc:euf:ecopap:0232

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Related research

Keywords: Wage structure; wage differentials by skills; demand for labour; European Union; wage compression; Mourre;

References

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  1. L. Nunziata, 2002. "Institutions and Wage Determination: A Multi-Country Approach," Working Papers 433, Dipartimento Scienze Economiche, Universita' di Bologna.
  2. Rebitzer, James B. & Taylor, Lowell J., 1995. "The consequences of minimum wage laws Some new theoretical ideas," Journal of Public Economics, Elsevier, vol. 56(2), pages 245-255, February.
  3. Juan F. Jimeno & Diego Rodríguez-Palenzuela, 2003. "Youth Unemployment in the OECD: Demographic Shifts, Labour Market Institutions and Macroeconomic Shocks," Economics Working Papers 019, European Network of Economic Policy Research Institutes.
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  5. Bentolila Samuel & Saint-Paul Gilles, 2003. "Explaining Movements in the Labor Share," The B.E. Journal of Macroeconomics, De Gruyter, vol. 3(1), pages 1-33, October.
  6. Bertola, Giuseppe & Blau, Francine D & Kahn, Lawrence, 2002. "Labour Market Institutions and Demographic Employment Patterns," CEPR Discussion Papers 3448, C.E.P.R. Discussion Papers.
  7. Acemoglu, D. & Pischke, J.S., 1997. "The Structure of Wages and Investment in General Training," Working papers 97-24, Massachusetts Institute of Technology (MIT), Department of Economics.
  8. bertola, G. & Rogerson, R., 1996. "Institutions and Labor Reallocation," Papers 272, Banca Italia - Servizio di Studi.
  9. John M. Abowd & Francis Kramarz & David N. Margolis, 1999. "High Wage Workers and High Wage Firms," Econometrica, Econometric Society, vol. 67(2), pages 251-334, March.
  10. Krueger, Alan B & Summers, Lawrence H, 1988. "Efficiency Wages and the Inter-industry Wage Structure," Econometrica, Econometric Society, vol. 56(2), pages 259-93, March.
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  12. Lindquist, Matthew J., 2005. "The welfare costs of union wage compression," European Economic Review, Elsevier, vol. 49(3), pages 639-658, April.
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Citations

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Cited by:
  1. Michel Dumont, 2008. "Working Paper 22-08 - Wages and employment by level of education and occupation in Belgium," Working Papers 0822, Federal Planning Bureau, Belgium.
  2. Lu�s Santos-Pinto, 2012. "Labor Market Signaling and Self-Confidence: Wage Compression and the Gender Pay Gap," Journal of Labor Economics, University of Chicago Press, vol. 30(4), pages 873 - 914.
  3. Hassler, John & Rodríguez Mora, José Vicente & Zeira, Joseph, 2000. "Inequality and Mobility," CEPR Discussion Papers 2497, C.E.P.R. Discussion Papers.
  4. repec:hal:cesptp:halshs-00186363 is not listed on IDEAS

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