The Role of Wage and Skill Differences in US-German Employment Differences
Greater job creation in the US than in Germany has often been related to greater wage dispersion coupled with less regulated labour and product markets in the US. Based on the Comparative German American Structural Database and the International Adult Literacy Survey we find that employment of skilled to unskilled labour is unrelated to differences in skill premium but that changes in relative employment are related to changes in relative wages raising the possibility of some substitution behavior. Still, the differing dispersion of wages is not a major contributor to differences in employment rates. The jobs problem in Germany is one of a general lack in demand for labor.
|Date of creation:||Jan 2000|
|Publication status:||published as Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), vol. 219/1-2 (July 1999): 49-66|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
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- 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.
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- Siebert, Horst, 1997. "Labor market rigidities and unemployment in Europe," Kiel Working Papers 787, Kiel Institute for the World Economy (IfW).
- Richard B. Freeman & Ronald Schettkat, 2000. "Low Wage Services: Interpreting the US - German Difference," NBER Working Papers 7611, National Bureau of Economic Research, Inc.
- 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.
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