Wage Determination in Economies in Transition: Ireland Spain and Portugal
This paper considers the experience of three existing member states and how the process of convergence has affected, and in turn been affected by, the performance of their labour markets. It concentrates on the process of wage determination in three countries Ireland, Spain and Portugal. In the case of Ireland, while EU membership occurred in 1973, the process of transition began around 1960 and has continued over a protracted period of forty years. For Portugal and Spain the process has been more concentrated. Liberalisation and democratisation of their economies took place in the 1970s and EU membership occurred in 1986. The changes that took place in these societies affected the labour market both directly and indirectly. In this paper we consider how the process of transition, including freeing of trade and EU membership, has affected both the demand for labour and the supply of labour. In the case of labour supply the role of trade unions has changed, with direct implications for the wage bargaining process itself. EU membership has also opened up the possibility of migration affecting labour supply. On the demand side, membership of the EU and the completion of the Single Market have changed the focus for many of the firms operating in these previously rather closed economies. Today firms producing tradable goods and services are competing in a global market and this has important implications for the factors driving their demand for labour. In Section 2 of this paper we examine the movement of wage rates over the period of convergence. In Section 3 we set out models of wage determination that allow for new effects on wage determination arising from the EU integration process. Section 4 describes the results obtained from estimating these models using data for Ireland, Spain and Portugal. Conclusions are discussed in Section 5.
|Date of creation:||Dec 2001|
|Date of revision:|
|Contact details of provider:|| Postal: Whitaker Square, Sir John Rogerson's Quay, Dublin 2|
Phone: (353-1) 863 2000
Fax: (353-1) 863 2100
Web page: http://www.esri.ie
More information through EDIRC
References listed on IDEAS
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.:
- Blanchard, Olivier & Jimeno, Juan F, 1995. "Structural Unemployment: Spain versus Portugal," American Economic Review, American Economic Association, vol. 85(2), pages 212-18, May.
- Kevin H. O'Rourke & Jeffrey G. Williamson, 1995.
"Around the European periphery 1870-1913 : globalization, schooling and growth,"
199517, School of Economics, University College Dublin.
- O'Rourke, Kevin H. & Williamson, Jeffrey G., 1997. "Around the European periphery 1870 1913: Globalization, schooling and growth," European Review of Economic History, Cambridge University Press, vol. 1(02), pages 153-190, August.
- O'Rourke, Kevin Hjortshøj & Williamson, Jeffrey G, 1996. "Around the European Periphery 1870-1913: Globalization, Schooling and Growth," CEPR Discussion Papers 1343, C.E.P.R. Discussion Papers.
- Kevin H. O'Rourke & Jeffrey G. Williamson, 1995. "Around the European Periphery 1870-1913: Globalization, Schooling and Growth," NBER Working Papers 5392, National Bureau of Economic Research, Inc.
- McCoy, Daniel & Duffy, David & MacCoille, C, 2000. "Quarterly Economic Commentary, December 2000," Forecasting Report, Economic and Social Research Institute (ESRI), number QEC20004, December.
- Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005.
"Unemployment: Macroeconomic Performance and the Labour Market,"
Oxford University Press, number 9780199279173, December.
- Layard, Richard & Nickell, Stephen & Jackman, Richard, 1991. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780198284345, December.
- Olympia Bover & Pilar García-Perea & Pedro Portugal, 1998.
"A Comparative Study of the Portuguese and Spanish Labour Markets,"
9807, Banco de España;Working Papers Homepage.
- Olympia Bover & Pilar García-Perea & Pedro Portugal, 1998. "A Comparative Study of The Portuguese and Spanish Labour Markets," Working Papers w199801, Banco de Portugal, Economics and Research Department.
- John FitzGerald & Ide Kearney, 2000. "Convergence in Living Standards in Ireland: The Role of the New Economy," Papers WP134, Economic and Social Research Institute (ESRI).
- repec:crs:wpaper:9645 is not listed on IDEAS
- Pedro Portugal & Olivier Blanchard, 2001. "What Hides Behind an Unemployment Rate: Comparing Portuguese and U.S. Labor Markets," American Economic Review, American Economic Association, vol. 91(1), pages 187-207, March.
- Pesaran, M. H. & Shin, Y. & Smith, R. J., 1996. "Testing for the 'Existence of a Long-run Relationship'," Cambridge Working Papers in Economics 9622, Faculty of Economics, University of Cambridge.
- Ray Barrell & Karen Dury, 2001. "Asymmetric Labour Markets in a Converging Europe: Do Differences Matter?," Economics Working Papers 002, European Network of Economic Policy Research Institutes.
- Duffy, David & FitzGerald, John & Kearney, Ide & Smyth, Diarmaid, 1999. "Medium-Term Review 1999-2005, No. 7," Forecasting Report, Economic and Social Research Institute (ESRI), number MTR07, December.
- John FitzGerald, 1998. "Wage Formation and the Labour Market," Papers WP095, Economic and Social Research Institute (ESRI).
- Blanchard, Olivier & Wolfers, Justin, 2000.
"The Role of Shocks and Institutions in the Rise of European Unemployment: The Aggregate Evidence,"
Royal Economic Society, vol. 110(462), pages C1-33, March.
- Olivier Blanchard & Justin Wolfers, 1999. "The Role of Shocks and Institutions in the Rise of European Unemployment: The Aggregate Evidence," NBER Working Papers 7282, National Bureau of Economic Research, Inc.
- Ide Kearney, 1998. "Is There A Stable Migration Equation For Ireland?," Papers WP097, Economic and Social Research Institute (ESRI).
- Olympia Bover & Pilar García-Perea & Pedro Portugal, 2000. "Labour market outliers: Lessons from Portugal and Spain," Economic Policy, CEPR;CES;MSH, vol. 15(31), pages 379-428, October.
- John Curtis & John FitzGerald, 1994. "Convergence in an Open Labour Market," Papers WP045, Economic and Social Research Institute (ESRI).
- Bradley, John & Fitzgerald, John, 1988. "Industrial output and factor input determination in an econometric model of a small open economy," European Economic Review, Elsevier, vol. 32(6), pages 1227-1241, July.
When requesting a correction, please mention this item's handle: RePEc:esr:wpaper:wp141. 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: (Sarah Burns)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 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.