IDEAS home Printed from https://ideas.repec.org/p/ces/ceswps/_200.html
   My bibliography  Save this paper

Real and Monetary Challenges to Wage Policy in Germany at the Turn of the Millennium: Technical Progress, Globalization and European Monetary Union

Author

Listed:
  • Wolfgang Franz

Abstract

At the turn of the millennium three frequently cited potential causes of new challenges for wage p olicy in Germany are revisited in this study: skilled-biased technological progress, the increasing international integration of labor and product markets, and the monetary integration of the EMU. While there is now a fairly broad consensus on the basic fa cts about the development of wages and employment across skill groups, there is considerable disagreement to explain these trends, in particular to what extent skill-biased technical change and trade liberalization share a major responsibility. The conclusion of this paper is that both factors are at work with a slight emphasis on the first candidate. Moreover, while EMU in our opinion does not represent the major threat for wage policy, it is the Single Market which requires wage policy to be on the lookout and to meet those challenges.Monetary Union

Suggested Citation

  • Wolfgang Franz, 1999. "Real and Monetary Challenges to Wage Policy in Germany at the Turn of the Millennium: Technical Progress, Globalization and European Monetary Union," CESifo Working Paper Series 200, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_200
    as

    Download full text from publisher

    File URL: http://www.cesifo-group.de/DocDL/cesifo_wp200.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Ulrich Kaiser, 2000. "New Technologies And The Demand For Heterogeneous Labor: Firm-Level Evidence For The German Business-Related Service Sector," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 9(5), pages 465-486.
    2. Jonathan E. Haskel & Matthew J. Slaughter, 1998. "Does the Sector Bias of Skill-Biased Technical Change Explain Changing Wage Inequality?," NBER Working Papers 6565, National Bureau of Economic Research, Inc.
    3. Fitzenberger, Bernd & Franz, Wolfgang, 1997. "Flexibilität der qualifikatorischen Lohnstruktur und Lastverteilung der Arbeitslosigkeit: Eine ökonometrische Analyse für Westdeutschland," ZEW Discussion Papers 97-32, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    4. Funke, Michael & Hall, Stephen & Ruhwedel, Ralf, 1999. "Shock Hunting: The Relative Importance of Industry-Specific, Region-Specific and Aggregate Shocks in the OECD Countries," Manchester School, University of Manchester, vol. 67(0), pages 49-65, Supplemen.
    5. Entorf, Horst & Gollac, Michel & Kramarz, Francis, 1999. "New Technologies, Wages, and Worker Selection," Journal of Labor Economics, University of Chicago Press, vol. 17(3), pages 464-491, July.
    6. Alan B. Krueger, 1993. "How Computers Have Changed the Wage Structure: Evidence from Microdata, 1984–1989," The Quarterly Journal of Economics, Oxford University Press, vol. 108(1), pages 33-60.
    7. Decressin, Jorg & Fatas, Antonio, 1995. "Regional labor market dynamics in Europe," European Economic Review, Elsevier, vol. 39(9), pages 1627-1655, December.
    8. Patrick A. Puhani, 2001. "Labour Mobility: An Adjustment Mechanism in Euroland? Empirical Evidence for Western Germany, France and Italy," German Economic Review, Verein für Socialpolitik, vol. 2(2), pages 127-140, May.
    9. Wood Júnior, Thomaz, 1995. "Workers," RAE - Revista de Administração de Empresas, FGV-EAESP Escola de Administração de Empresas de São Paulo (Brazil), vol. 35(2), March.
    10. Davis, Donald R., 1998. "Technology, unemployment, and relative wages in a global economy," European Economic Review, Elsevier, vol. 42(9), pages 1613-1633, November.
    11. André Sapir & Marco Buti, 1998. "Economic policy in EMU," ULB Institutional Repository 2013/8078, ULB -- Universite Libre de Bruxelles.
    12. Eichengreen, Barry, 1990. "One Money for Europe? Lessons from the US Currency Union," Department of Economics, Working Paper Series qt6ks1k831, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    13. Nickell, Stephen & Bell, Brian, 1996. "Changes in the Distribution of Wages and Unemployment in OECD Countries," American Economic Review, American Economic Association, vol. 86(2), pages 302-308, May.
    14. Ronald W. Jones, 1965. "The Structure of Simple General Equilibrium Models," Journal of Political Economy, University of Chicago Press, vol. 73, pages 557-557.
    15. Davis, Donald R, 1998. "Does European Unemployment Prop Up American Wages? National Labor Markets and Global Trade," American Economic Review, American Economic Association, vol. 88(3), pages 478-494, June.
    16. Desjonqueres, Thibaut & Machin, Stephen & Van Reenen, John, 1999. " Another Nail in the Coffin? Or Can the Trade Based Explanation of Changing Skill Structures Be Resurrected?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(4), pages 533-554, December.
    17. George E. Johnson, 1997. "Changes in Earnings Inequality: The Role of Demand Shifts," Journal of Economic Perspectives, American Economic Association, vol. 11(2), pages 41-54, Spring.
    18. John E. DiNardo & Jörn-Steffen Pischke, 1997. "The Returns to Computer Use Revisited: Have Pencils Changed the Wage Structure Too?," The Quarterly Journal of Economics, Oxford University Press, vol. 112(1), pages 291-303.
    19. Smolny, Werner, 1998. "Innovations, Prices and Employment: A Theoretical Model and an Empirical Application for West German Manufacturing Firms," Journal of Industrial Economics, Wiley Blackwell, vol. 46(3), pages 359-381, September.
    20. Koebel, Bertrand M. & Falk, Martin, 1999. "Curvature conditions and substitution pattern among capital, energy, materials and heterogeneous labour," ZEW Discussion Papers 99-06, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    21. Feldstein, Martin & Horioka, Charles, 1980. "Domestic Saving and International Capital Flows," Economic Journal, Royal Economic Society, vol. 90(358), pages 314-329, June.
    22. Stirböck, Claudia & Heinemann, Friedrich, 1999. "Capital Mobility within EMU," ZEW Discussion Papers 99-19, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    23. John P. Haisken-DeNew & Klaus F. Zimmermann, "undated". "Wage and Mobility Effects of Trade and Migration," Working Papers _001, SELAPO Center for Human Resources.
    24. Haskel, Jonathan, 1999. "Small Firms, Contracting-Out, Computers and Wage Inequality: Evidence from UK Manufacturing," Economica, London School of Economics and Political Science, vol. 66(261), pages 1-21, February.
    25. Horst Siebert, 1997. "Labor Market Rigidities: At the Root of Unemployment in Europe," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 37-54, Summer.
    26. Adrian Wood, 1995. "How Trade Hurt Unskilled Workers," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 57-80, Summer.
    27. Jeffrey D. Sachs & Howard J. Shatz, 1994. "Trade and Jobs in Manufacturing," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 25(1), pages 1-84.
    28. Phillip L Swagel & Matthew J. Slaughter, 1997. "The Effect of Globalization on Wages in the Advanced Economies," IMF Working Papers 97/43, International Monetary Fund.
    29. Paul Krugman, 1995. "Growing World Trade: Causes and Consequences," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1, 25th A), pages 327-377.
    30. Falk, Martin & Seim, Katja, 1999. "Workers' skill level and information technology: evidence from German service firms," ZEW Discussion Papers 99-14, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    31. Huw Lloyd-Ellis, 1999. "Endogenous Technological Change and Wage Inequality," American Economic Review, American Economic Association, vol. 89(1), pages 47-77, March.
    32. Gregg, Paul & Manning, Alan, 1997. "Skill-biassed change, unemployment and wage inequality," European Economic Review, Elsevier, vol. 41(6), pages 1173-1200, June.
    33. Gundlach, Erich & Nunnenkamp, Peter, 1997. "Labor markets in the global economy: How to prevent rising wage gaps and unemployment," Kiel Discussion Papers 305, Kiel Institute for the World Economy (IfW).
    34. Ana L. Revenga, 1992. "Exporting Jobs?The Impact of Import Competition on Employment and Wages in U. S. Manufacturing," The Quarterly Journal of Economics, Oxford University Press, vol. 107(1), pages 255-284.
    35. Butler, Alison & Dueker, Michael, 1999. "Does foreign innovation affect domestic wage inequality?," Journal of International Economics, Elsevier, vol. 47(1), pages 61-89, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wouter J. den Haan & Christian Haefke & Garey Ramey, 2005. "Turbulence And Unemployment In A Job Matching Model," Journal of the European Economic Association, MIT Press, vol. 3(6), pages 1360-1385, December.

    More about this item

    Keywords

    Wages; wage structure; skill-biased technological change; international trade; European Monetary Union; globalisation; globalization;

    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ces:ceswps:_200. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Klaus Wohlrabe). General contact details of provider: http://edirc.repec.org/data/cesifde.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.