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The development of the wage share in the euro area since the start of the pandemic

Author

Listed:
  • Bodnár, Katalin
  • Mohr, Matthias

Abstract

This box examines the wage share in the euro area, which has edged down since the start of the pandemic, as workers have so far not been able to recover real wage losses amidst high inflation and robust profit margins. The decline is in most sectors, except for less contact-intensive private services and public services. The reduced wage share suggests that part of the recent terms-of-trade shock and its impact on consumer price inflation has been absorbed by workers and that second-round effects from wages on inflation have so far been relatively moderate. JEL Classification: E24, E25, E31, E37

Suggested Citation

  • Bodnár, Katalin & Mohr, Matthias, 2023. "The development of the wage share in the euro area since the start of the pandemic," Economic Bulletin Boxes, European Central Bank, vol. 4.
    • Handle: RePEc:ecb:ecbbox:2023:0004:4
    Note: 2881411
    as

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    File URL: https://www.ecb.europa.eu//pub/economic-bulletin/focus/2023/html/ecb.ebbox202304_04~0dee9ead8e.en.html
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    More about this item

    Keywords

    inflation; labour market; second-round effects; Wage share;
    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
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications

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