Is there a signalling role for public wages? Evidence for the euro area based on macro data
Do public sector wages exert pressures on private sector wages, or has the private sector a leadership role in wage setting? This paper tries to isolate the pure signalling effect that one sector might exert on the other by controlling for other determinants of wages (prices, productivity, institutions) for the main euro area economies (Germany, France, Italy and Spain) and the periods 1980-2007 and 1991-2007. It exploits available quarterly information not yet used in the literature, and combines different data sources in the framework of mixed-frequencies time series models. The quarterly frequency of our data allows us to check the existence of purely intra-annual links between public and private sector wages (signalling effect). There is strong evidence of public wages’ leadership, either in conjunction with bi-directional links from the private sector (Germany and Spain) or pure public wage leadership (France in the sample 1991-2007, Italy for within-the-year linkages). JEL Classification: C32, C53, J30, J51, J52, E62, E63, H50, H6
|Date of creation:||Jan 2010|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +49 69 1344 0
Fax: +49 69 1344 6000
Web page: http://www.ecb.europa.eu/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Steffen L. Lauritzen & Thomas S. Richardson, 2002. "Chain graph models and their causal interpretations," Journal of the Royal Statistical Society Series B, Royal Statistical Society, vol. 64(3), pages 321-348.
- Tommaso Proietti & Filippo Moauro, 2006.
"Dynamic factor analysis with non-linear temporal aggregation constraints,"
Journal of the Royal Statistical Society Series C,
Royal Statistical Society, vol. 55(2), pages 281-300.
- Tommaso Proietti & Filippo Moauro, 2004. "Dynamic Factor Analysis with Nonlinear Temporal Aggregation Constraints," Econometrics 0401003, EconWPA.
- Ardagna, Silvia, 2007. "Fiscal Policy in Unionized Labor Markets," Scholarly Articles 2580048, Harvard University Department of Economics.
- Garrett, Ian & Priestley, Richard, 2000. "Dividend Behaviour and Dividend Signaling," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 35(02), pages 173-189, June.
- Lindquist, Matthew J. & Vilhelmsson, Roger, 2004.
"Is the Swedish Central Government a Wage Leader?,"
Working Paper Series
8/2004, Swedish Institute for Social Research.
- Feldstein, Martin, 2008.
"Did wages reflect growth in productivity?,"
Journal of Policy Modeling,
Elsevier, vol. 30(4), pages 591-594.
- Schiantarelli, Fabio & Perotti, Roberto & Ardagna, Silvia & Alesina, Alberto, 2002.
"Fiscal Policy, Profits, and Investment,"
4685103, Harvard University Department of Economics.
- Alesina, Alberto F & Ardagna, Silvia & Perotti, Roberto & Schiantarelli, Fabio, 1999. "Fiscal Policy, Profits and Investment," CEPR Discussion Papers 2250, C.E.P.R. Discussion Papers.
- Alberto Alesina & Silvia Ardagna & Roberto Perotti & Fabio Schiantarelli, 2000. "Fiscal Policy, Profits, and Investment," Boston College Working Papers in Economics 504, Boston College Department of Economics.
- Alberto Alesina & Silvia Ardagna & Roberto Perotti & Fabio Schiantarelli, 1999. "Fiscal Policy, Profits, and Investment," NBER Working Papers 7207, National Bureau of Economic Research, Inc.
- Lamo, Ana & Pérez, Javier J. & Schuknecht, Ludger, 2008. "Public and private sector wages: co-movement and causality," Working Paper Series 0963, European Central Bank.
- Selva Demiralp & Kevin D. Hoover, 2003.
"Searching for the Causal Structure of a Vector Autoregression,"
Oxford Bulletin of Economics and Statistics,
Department of Economics, University of Oxford, vol. 65(s1), pages 745-767, December.
- Kevin Hoover & Selva Demiralp, 2003. "Searching for the Causal Structure of a Vector Autoregression," Working Papers 33, University of California, Davis, Department of Economics.
- Ram, Rati, 1984. "Causal Ordering across Inflation and Productivity Growth in the Post-war United States," The Review of Economics and Statistics, MIT Press, vol. 66(3), pages 472-77, August.
- Afonso, António & Gomes, Pedro, 2014.
"Interactions between private and public sector wages,"
Journal of Macroeconomics,
Elsevier, vol. 39(PA), pages 97-112.
- António Afonso & Pedro Gomes, 2008. "Interactions between Private and Public Sector Wages," Working Papers Department of Economics 2008/55, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
- Afonso, António & Gomes, Pedro Maia, 2010. "Interactions between Private and Public Sector Wages," IZA Discussion Papers 5322, Institute for the Study of Labor (IZA).
- Afonso, António & Gomes, Pedro, 2008. "Interactions between private and public sector wages," Working Paper Series 0971, European Central Bank.
- Holmlund, B. & Ohlsson, H., 1990. "Wage Linkages Between Private and Public Sectors," Papers 1990t, Uppsala - Working Paper Series.
- Ardagna, Silvia, 2007. "Fiscal policy in unionized labor markets," Journal of Economic Dynamics and Control, Elsevier, vol. 31(5), pages 1498-1534, May.
- Marco Maffezzoli, 2001.
"Non-Walrasian Labor Markets and Real Business Cycles,"
Review of Economic Dynamics,
Elsevier for the Society for Economic Dynamics, vol. 4(4), pages 860-892, October.
- Marco Maffezzoli, . "Non-Walrasian Labor Markets and Real Business Cycles," Working Papers 167, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- Marco Maffezzoli, 2000. "Non-Walrasian Labor Markets and Real Business Cycles," Macroeconomics 0004009, EconWPA.
- Andrew Harvey & Chia-Hui Chung, 2000. "Estimating the underlying change in unemployment in the UK," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 163(3), pages 303-309.
- Lange, Joe & Sack, Brian & Whitesell, William, 2003. " Anticipations of Monetary Policy in Financial Markets," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 35(6), pages 889-909, December.
- Kåre Johansen & Bjarne Strøm, 2003. "Efficiency wages, wage comparison, and public sector budgeting," Economics of Governance, Springer, vol. 4(3), pages 215-228, November.
- Kuhn, Peter & Gu, Wulong, 1999. "Learning in Sequential Wage Negotiations: Theory and Evidence," Journal of Labor Economics, University of Chicago Press, vol. 17(1), pages 109-40, January.
- Feldstein, Martin, 2008. "Did Wages Reflect Growth in Productivity?," Scholarly Articles 2794832, Harvard University Department of Economics.
- repec:hrv:faseco:3353756 is not listed on IDEAS
- John H. Tyler & Richard J. Murnane & John B. Willett, 2000. "Estimating The Labor Market Signaling Value Of The GED," The Quarterly Journal of Economics, MIT Press, vol. 115(2), pages 431-468, May.
- Donald Freeman & David Yerger, 2000. "Does inflation lower productivity? Time series evidence on the impact of inflation on labor productivity in 12 OECD nations," Atlantic Economic Journal, International Atlantic Economic Society, vol. 28(3), pages 315-332, September.
- Demekas, Dimitri G & Kontolemis, Zenon G, 2000.
" Government Employment and Wages and Labour Market Performance,"
Oxford Bulletin of Economics and Statistics,
Department of Economics, University of Oxford, vol. 62(3), pages 391-415, July.
- Zenon Kontolemis G. & Dimitri G. Demekas, 1999. "Government Employment and Wages and Labor Market Performance," IMF Working Papers 99/55, International Monetary Fund.
- Jocobson, T. & Ohlsson, H., 1991.
"Cointegrating Sectoral Wages in Sweden - a Maximum Likelihood Approach,"
1991t, Uppsala - Working Paper Series.
- Jacobson, Tor & Ohlsson, Henry, 1994. "Long-Run Relations between Private and Public Sector Wages in Sweden," Empirical Economics, Springer, vol. 19(3), pages 343-60.
- Eichler, Michael, 2007. "Granger causality and path diagrams for multivariate time series," Journal of Econometrics, Elsevier, vol. 137(2), pages 334-353, April.
- Andrew Weiss, 1995. "Human Capital vs. Signalling Explanations of Wages," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 133-154, Fall.
- Toda, Hiro Y. & Yamamoto, Taku, 1995. "Statistical inference in vector autoregressions with possibly integrated processes," Journal of Econometrics, Elsevier, vol. 66(1-2), pages 225-250.
- Kent Friberg, 2007. "Intersectoral wage linkages: the case of Sweden," Empirical Economics, Springer, vol. 32(1), pages 161-184, April.
- Paul Conway & Giuseppe Nicoletti, 2006. "Product Market Regulation in the Non-Manufacturing Sectors of OECD Countries: Measurement and Highlights," OECD Economics Department Working Papers 530, OECD Publishing.
When requesting a correction, please mention this item's handle: RePEc:ecb:ecbwps:20101148. 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: (Official Publications)
If references are entirely missing, you can add them using this form.