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Current wage pressures in some EU countries

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  • Pekka Sauramo

Abstract

This paper is concerned with current wage pressures in 14 EU countries. Wage pressures are analysed by studying simultaneously past and recent changes in unemployment and functional distribution of income. The quantification of current wage pressures is based on the estimation of wage curves and dynamic wage equations. According to the results of the analysis, upward wage pressures – interpreted as wage increases that lead to an increase in the wage share – are strongest in Italy and Spain. In Germany there are upward pressures but not as strong as in these countries. Portugal is the best example of a country where there is strong pressure for wage moderation. The results support the view that, for the macroeconomic stability of the euro area, it is desirable that in the near future nominal wages in Germany rise faster than in recent years.

Suggested Citation

  • Pekka Sauramo, 2007. "Current wage pressures in some EU countries," Working Papers 230, Työn ja talouden tutkimus LABORE, The Labour Institute for Economic Research LABORE.
    • Handle: RePEc:pst:wpaper:230
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    References listed on IDEAS

    as
    1. Blanchflower, David G. & Oswald, Andrew J., 2005. "The Wage Curve Reloaded," IZA Discussion Papers 1665, Institute of Labor Economics (IZA).
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    3. Peter Nijkamp & Jacques Poot, 2005. "The Last Word on the Wage Curve?," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pages 421-450, July.
    4. Albert van der Horst, 2003. "Structural Estimates of Equilibrium Unemployment in Six OECD Economies," Economics Working Papers 022, European Network of Economic Policy Research Institutes.
    5. Albert van der Horst, 2003. "Structural estimates of equilibrium unemployment in six OECD economies," CPB Discussion Paper 19.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    6. Rowthorn, Robert, 1999. "Unemployment, Wage Bargaining and Capital-Labour Substitution," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 23(4), pages 413-425, July.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    wages; functional distribution of income; unemployment;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution

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