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Changes in the wage structure in EU countries

Author

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  • Christopoulou, Rebekka
  • Jimeno, Juan F.
  • Lamo, Ana

Abstract

We study changes in the wage structures in nine EU countries over 1995-2002 and the role of demand, supply and institutional developments in shaping these changes. Using comparable cross-country microeconomic data, we compute for each country and at each decile of the wage distribution, the part of the observed wage change that is due to changes in the composition of workers, employers, and jobs’ characteristics, and the part due to changes in the returns to these characteristics. We find that composition effects derived from changes in age, gender or education of the labour force, largely exogenous to economic developments, had a minor contribution to the observed wage dynamics. In contrast, return and composition effects from characteristics likely driven by economic developments are found most relevant to explain the observed changes. We relate wages and their various components with macroeconomic and institutional trends and find that technology and globalisation are associated with wage increases; migration is associated with declines in wages; whereas the effect of labour market institutions has been mixed. JEL Classification: J31

Suggested Citation

  • Christopoulou, Rebekka & Jimeno, Juan F. & Lamo, Ana, 2010. "Changes in the wage structure in EU countries," Working Paper Series 1199, European Central Bank.
  • Handle: RePEc:ecb:ecbwps:20101199
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    File URL: http://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp1199.pdf
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    References listed on IDEAS

    as
    1. Philip Du Caju & Gábor Kátay & Ana Lamo & Daphne Nicolitsas & Steven Poelhekke, 2010. "Inter-Industry Wage Differentials In EU Countries: What Do Cross-Country Time Varying Data Add to the Picture?," Journal of the European Economic Association, MIT Press, vol. 8(2-3), pages 478-486, 04-05.
    2. Christian Dustmann & Johannes Ludsteck & Uta Schönberg, 2009. "Revisiting the German Wage Structure," The Quarterly Journal of Economics, Oxford University Press, vol. 124(2), pages 843-881.
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    1. ¿Vale la pena estudiar? (VI) La inusual caída de la ganancia salarial resultante de la educación avanzada
      by Luis Garicano in Nada Es Gratis on 2010-12-09 05:30:40

    Citations

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    Cited by:

    1. Wolfgang Pointner & Alfred Stiglbauer, 2010. "Changes in the Austrian structure of wages, 1996–2002: evidence from linked employer-employee data," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 37(2), pages 105-125, May.
    2. Christopoulou, Rebekka & Kosma, Theodora, 2009. "Skills and wage inequality in Greece: evidence from matched employer-employee data, 1995-2002," LSE Research Online Documents on Economics 24198, London School of Economics and Political Science, LSE Library.
    3. Bergin, Adele & Kelly, Elish & McGuinness, Seamus, 2012. "Explaining Changes in Earnings and Labour Costs During the Recession," Papers EC9, Economic and Social Research Institute (ESRI).
    4. Florentino Felgueroso & Manuel Hidalgo-Pérez & Sergi Jiménez-Martín, 2016. "The Puzzling Fall of the Wage Skill Premium in Spain," Manchester School, University of Manchester, vol. 84(3), pages 390-435, June.
    5. Raquel Carrasco & Juan F. Jimeno & A. Carolina Ortega, 2011. "Accounting for changes in the Spanish wage distribution: the role of employment Composition effects," Working Papers 1120, Banco de España;Working Papers Homepage.
    6. Andrea Brandolini & Alfonso Rosolia & Roberto Torrini, 2011. "The distribution of employees’ labour earnings in the European Union: Data, concepts and first results," Working Papers 198, ECINEQ, Society for the Study of Economic Inequality.
    7. Salverda, Wiemer & Checchi, Daniele, 2014. "Labour-Market Institutions and the Dispersion of Wage Earnings," IZA Discussion Papers 8220, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    Quantile Regressions; Wage Structure;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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