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The cohort size-wage relationship in Europe

Author

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  • John Moffat

    () (Durham University)

  • Duncan Roth

    () (University of Marburg)

Abstract

The demographic and education composition of European countries is changing: the population share of young individuals is declining while that of the highly educated is rising. This paper estimates the impact of cohort size on wages using data on 21 European countries covering 2007-2010 to cast light on the economic consequences of changes in the profile of the labour force. The effect of cohort size on wages is identified through an instrumental variables strategy which, in contrast to previous analyses of European data, addresses self-selection into geographical areas as well as into educational groups. The results support the hypothesis that cohort size has a negative effect on male wages, particularly for the highly educated. However, these negative cohort size effects are not persistent.

Suggested Citation

  • John Moffat & Duncan Roth, 2013. "The cohort size-wage relationship in Europe," MAGKS Papers on Economics 201346, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  • Handle: RePEc:mar:magkse:201346
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    References listed on IDEAS

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    Cited by:

    1. Mario Reinhold & Stephan Thomsen, 2017. "The changing situation of labor market entrants in Germany [Die veränderliche Situation für Berufseinsteiger in Deutschland]," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 50(1), pages 161-174, August.
    2. Duncan Roth & John Moffat, 2014. "Cohort size and youth unemployment in Europe: a regional analysis," ERSA conference papers ersa14p1546, European Regional Science Association.
    3. de Graaff, Thomas & Ozgen, Ceren & Roth, Duncan, 2018. "Varying Youth Cohort Effects on Regional Labour Market Outcomes in Germany," IZA Discussion Papers 11932, Institute of Labor Economics (IZA).
    4. de Graaff, Thomas & Arribas-Bel, Daniel & Ozgen, Ceren, 2017. "Demographic Aging and Employment Dynamics in German Regions: Modeling Regional Heterogeneity," IZA Discussion Papers 10734, Institute of Labor Economics (IZA).
    5. John Moffat & Duncan Roth, 2017. "Cohort size and youth labour-market outcomes in Europe," Economics Bulletin, AccessEcon, vol. 37(4), pages 2735-2740.
    6. Viorel ROTILA & Lidia CELMARE, 2017. "Analysis of a Major Inequity in the Budgetary Wage System: Gerontocracy. Arguments and Solutions," LUMEN Proceedings, Editura Lumen, vol. 1(1), pages 730-739, December.
    7. Garloff, Alfred & Roth, Duncan, 2016. "Regional age structure and young workers' wages," IAB Discussion Paper 201606, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    8. John Moffat & Duncan Roth, 2014. "Cohort size and youth labour-market outcomes: the role of measurement error," MAGKS Papers on Economics 201440, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).

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    More about this item

    Keywords

    Cohort size; wages; causal effect; instrumental variables; EU-SILC;
    All these keywords.

    JEL classification:

    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • 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

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