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Wages and Employment Growth: Disaggregated Evidence for West Germany

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  • Jens Suedekum

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  • Uwe Blien

    ()

Abstract

We 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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Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa04p641.

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Date of creation: Aug 2004
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Handle: RePEc:wiw:wiwrsa:ersa04p641

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  1. Blien, Uwe & Wolf, Katja, 2002. "Regional development of employment in eastern Germany. An analysis with an econometric analogue to shift-share techniques," ERSA conference papers ersa02p263, European Regional Science Association.
  2. Jens Suedekum, 2004. "Selective migration, union wage setting and unemployment disparities in West Germany," International Economic Journal, Korean International Economic Association, vol. 18(1), pages 33-48.
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  13. Jürgen Jerger & Oliver Landmann, 2002. "Lohnpolitik und Beschäftigung - Debatte ohne Ende?," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 3(2), pages 207-224, 05.
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Citations

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Cited by:
  1. Ulrich Zierahn, 2011. "The importance of spatial autocorrelation for regional employment growth in Germany," ERSA conference papers ersa10p205, European Regional Science Association.
  2. Blien, Uwe & Suedekum, Jens & Wolf, Katja, 2006. "Local employment growth in West Germany: A dynamic panel approach," Labour Economics, Elsevier, vol. 13(4), pages 445-458, August.
  3. Jens Suedekum, 2006. "Concentration and Specialization Trends in Germany since Re-unification," Regional Studies, Taylor and Francis Journals, vol. 40(8), pages 861-873.
  4. Schlitte, Friso, 2010. "Local human capital, segregation by skill, and skill-specific employment growth," HWWI Research Papers 1-32, Hamburg Institute of International Economics (HWWI).
  5. Vasilescu, Denisa Maria & Aparaschivei, Larisa & Roman, Mihai Daniel, 2012. "Employment in Romania: evidence from a panel data analysis," MPRA Paper 38388, University Library of Munich, Germany.

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