Wage Compression in Europe: First Evidence from the Structure of Earnings Survey 2002
AbstractThis paper aims at examining wage compression in Europe, defined as a relatively small wage differentials compared with productivity differences. Using the publicly available data on wages drawn from the Structure of Earnings Survey 2002, it 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. While the estimated wage compression is even higher across the levels of education, the evidence appears much less robust. Wage compression seems to be higher in the euro area and the EU15 than in the twelve New Member States, which is in line with their more flexible wage bargaining setting. Likewise, wage compression with the EU15 mainly occurs in continental and southern countries. Moreover, the compression of wages is not uniform across wage levels and more pronounced at the lower end of the earning distribution.
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Bibliographic InfoPaper provided by ULB -- Universite Libre de Bruxelles in its series Working Papers CEB with number 09-051.RS.
Length: 32 p.
Date of creation: 2009
Date of revision:
Publication status: Published by:
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Wage structure; wage differentials by skills; demand for labour; European Union.;
Find related papers by JEL classification:
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
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