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Still Searching for the Wage Curve: Evidence from Germany and Italy Author info | Abstract | Publisher info | Download info | Related research | Statistics Andreas Ammermueller () (ZEW Mannheim)
Claudio Lucifora () (Catholic University of Milan and IZA)
Federica Origo () (University of Bergamo)
Thomas Zwick () (ZEW Mannheim)
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This paper investigates the functioning of regional labour markets in Italy and Germany for different employee groups. In the light of high and persistent differences in unemployment and wage rates between the North and South of Italy and the West and East of Germany, we first derive theoretical hypotheses on group specific correlations between regional unemployment and individual wages. Using micro data on hourly wages properly matched to local unemployment rates, we specify and empirically test different wage equations. On the basis of our results, we find no evidence for the existence of a "wage curve" in Italy. In the case of Germany, results are quite sensitive to the model specification and the employee group considered. In both countries, the reaction of wages to local unemployment varies significantly along the wage distribution, being more sensitive around the median quantiles. We conclude that there is no uniform wage curve and call for a differentiated analysis for various groups, taking into account the respective institutional setting.
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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number
2674.
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Length: 52 pages
Date of creation: Mar 2007Date of revision:
Handle: RePEc:iza:izadps:dp2674Contact 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
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Keywords: wage curve ; local labour markets ; quantile regressions ; Other versions of this item:
Find related papers by JEL classification: J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs J6 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies R1 - Urban, Rural, and Regional Economics - - General Regional Economics
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