Wages and Employment Growth: Disaggregated Evidence for West Germany
AbstractWe address the effects of wages on employment growth on the basis of a theoretical model from which cost and demand effects can be derived. In the empirical analysis we take a highly disaggregated perspective and apply a newly developed shift-share regression technique on an exhaustive and very accurate data set for West Germany. The regression shows that the impact of regional wages on employment growth is significantly negative. There is some variation of this effect across sectors, but in no case we find support for the claim that an exogenous wage increase leads to higher employment growth.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1128.
Length: 33 pages
Date of creation: Apr 2004
Date of revision:
Publication status: published as 'Stimulating employment growth with higher wages? A new approach to address an old controversy' in: Kyklos, 2007, 60 (3), 441-467
Contact details of provider:
Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org
Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Other versions of this item:
- Suedekum, Jens & Blien, Uwe, 2004. "Wages and Employment Growth : Disaggregated Evidence for West Germany," HWWA Discussion Papers 275, Hamburg Institute of International Economics (HWWA).
- Jens Suedekum & Uwe Blien, 2004. "Wages and Employment Growth: Disaggregated Evidence for West Germany," ERSA conference papers ersa04p641, European Regional Science Association.
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-05-09 (All new papers)
- NEP-GEO-2004-05-09 (Economic Geography)
- NEP-LAB-2004-05-09 (Labour Economics)
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