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. Keywords: Employment Growth, Shift-Share-Analysis, Regional Wages, Purchasing Power Argument. JEL- Classification: J23, E24, R11
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Bibliographic InfoPaper provided by European Regional Science Association in its series ERSA conference papers with number ersa04p641.
Date of creation: Aug 2004
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Other versions of this item:
- Suedekum, Jens & Blien, Uwe, 2004. "Wages and Employment Growth: Disaggregated Evidence for West Germany," IZA Discussion Papers 1128, Institute for the Study of Labor (IZA).
- Suedekum, Jens & Blien, Uwe, 2004. "Wages and Employment Growth : Disaggregated Evidence for West Germany," HWWA Discussion Papers 275, Hamburg Institute of International Economics (HWWA).
- 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-2005-11-09 (All new papers)
- NEP-GEO-2005-11-09 (Economic Geography)
- NEP-LAB-2005-11-09 (Labour Economics)
- NEP-MAC-2005-11-09 (Macroeconomics)
- NEP-URE-2005-11-09 (Urban & Real Estate Economics)
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