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Employment By Sector, Productivity And Wages In 5 European Countries, 1965-2015: Fifty Years Of Evolution In Germany, Spain, France, Italy And Uk


  • GUISAN, Maria-Carmen
  • EXPOSITO, Pilar


We analyze the evolution of employment by sector, production and wages in 5 European countries for a period of fifty years (1965-2015). We have estimated the elasticities Employment/Output with a model in levels (by LS and GLS) and a mixed dynamic model (by LS). The elasticity estimated in the model in levels by GLS and in the mixed dynamic model by LS show values around 0.37 for Agriculture, 0.21 for Industry, around 0.41 for Building and higher than 0.70 for Services. The main effect of industrial development has been the creation of millions of employments on Services, as well as the increase on labour productivity and average real wage of these economies. The results are a strong support to Kaldor´s views. Regarding wages the evolution has been positive, but less than expected by workers due to the effects of some economic policies, without enough support to industry. There was a diminution of the ratio Wage/Productivity from nearly 0.70 in year 1975 to approximately 0.60 in year 2012. We strongly recommend economic changes in European industrial policies addressed to foster economic development and increasing levels of real wages. The comparison of average real wages of these European countries with the United States show a gap, favourable to the U.S. if the comparison is made with Exchange Rates and that both average values are very alike if the comparison is made with Purchasing Power Parities (PPPs).

Suggested Citation

  • GUISAN, Maria-Carmen & EXPOSITO, Pilar, 2017. "Employment By Sector, Productivity And Wages In 5 European Countries, 1965-2015: Fifty Years Of Evolution In Germany, Spain, France, Italy And Uk," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 17(2), pages 33-46.
  • Handle: RePEc:eaa:aeinde:v:17:y:2017:i:2_3

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    Employment by sector; Econometric Models; Estimation of Elasticity Labor/Output; Kaldor; Productivity; Wages; Europe; Germany; Spain; France; Italy; UK; European Economic Policy; Industry.;

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • L7 - Industrial Organization - - Industry Studies: Primary Products and Construction
    • L8 - Industrial Organization - - Industry Studies: Services
    • N34 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Europe: 1913-
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe


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