Low Wage Services: Interpreting the US - German Difference
Is the expansion of jobs in low-wage services in Europe restricted by high wages? With services now the main sector source of employment growth this question becomes crucial and we examine it through a detailed comparison of the role of low-wage services in the US and Germany. We find a clear low-wage service jobs deficit' in Germany but this is not due to excessively high German wages. Relative wages in low-wage sectors are extremely similar in the two countries. This is a striking finding given the much wider wage distribution in the US. The explanation for this phenomenon is the much greater intra-industry wage dispersion in the US producing similar industry mean wages as the much narrower German distribution.
|Date of creation:||Mar 2000|
|Date of revision:|
|Publication status:||published as Gregory, S. Bazen and W. Salverda (eds.) Labour Market Inequalities: Problems and Policies of Low-Wage Employment in International Perspective. Oxford University Press, 2000.|
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- Oecd, 1998. "Key Employment Policy Challenges Faced by OECD Countries," OECD Labour Market and Social Policy Occasional Papers 31, OECD Publishing.
- Linda Bell & Richard Freeman, 1994. "Why Do Americans and Germans Work Different Hours?," NBER Working Papers 4808, 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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