Still searching for the wage curve: evidence from Germany and Italy
This paper investigates the functioning of regional labour markets in Italy and Germany for different employee groups. In the light of high and persistent differences in unemployment and wage rates between the North and South of Italy and the West and East of Germany, we first derive theoretical hypotheses on group specific correlations between regional unemployment and individual wages. Using micro data on hourly wages properly matched to local unemployment rates, we specify and empirically test different wage equations. On the basis of our results, we find no evidence for the existence of a ?wage curve? in Italy. In the case of Germany, results are quite sensitive to the model specification and the employee group considered. In both countries, the reaction of wages to local unemployment varies significantly along the wage distribution, being more sensitive around the median quantiles. We conclude that there is no uniform wage curve and call for a differentiated analysis for various groups, taking into account the respective institutional setting.
|Date of creation:||2007|
|Date of revision:|
|Contact details of provider:|| Postal: L 7,1; D - 68161 Mannheim|
Web page: http://www.zew.de/
More information through EDIRC
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.:
- C Bean, 1992.
"European Unemployment: A Survey,"
CEP Discussion Papers
dp0071, Centre for Economic Performance, LSE.
- Nickell, S. & Wadhwani, S., 1989.
"Insider Forces And Wage Determination,"
Economics Series Working Papers
9972, University of Oxford, Department of Economics.
- Devicenti francesco & Maida Agata & Pacelli Lia, 2005.
"The Resurrection of the Italian Wage Curve,"
Department of Economics and Statistics Cognetti de Martiis. Working Papers
200502, University of Turin.
- Dell’Aringa, Carlo & Lucifora, Claudio & Origo, Federica, 2005.
"Public Sector Pay and Regional Competitiveness: A First Look at Regional Public-Private Wage Differentials in Italy,"
IZA Discussion Papers
1828, Institute for the Study of Labor (IZA).
- Carlo Dell'Aringa & Claudio Lucifora & Federica Origo, 2007. "Public Sector Pay And Regional Competitiveness. A First Look At Regional Public-Private Wage Differentials In Italy," Manchester School, University of Manchester, vol. 75(4), pages 445-478, 07.
- Ammermueller, Andreas & Kuckulenz, Anja & Zwick, Thomas, 2009.
"Aggregate unemployment decreases individual returns to education,"
Economics of Education Review,
Elsevier, vol. 28(2), pages 217-226, April.
- Ammermüller, Andreas & Kuckulenz, Anja & Zwick, Thomas, 2006. "Aggregate Unemployment Decreases Individual Returns to Education," ZEW Discussion Papers 06-34, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Olivier Blanchard & Lawrence F. Katz, 1997.
"What We Know and Do Not Know about the Natural Rate of Unemployment,"
Journal of Economic Perspectives,
American Economic Association, vol. 11(1), pages 51-72, Winter.
- Blanchard, O & Katz, L, 1996. "What We Know and Do Not Know about the Natural Rate of Unemployment," Working papers 96-29, Massachusetts Institute of Technology (MIT), Department of Economics.
- Olivier Blanchard & Lawrence F. Katz, 1996. "What We Know and Do Not Know About the Natural Rate of Unemployment," NBER Working Papers 5822, National Bureau of Economic Research, Inc.
- Baltagi, Badi H. & Blien, Uwe, 1998. "The German wage curve: evidence from the IAB employment sample," Economics Letters, Elsevier, vol. 61(2), pages 135-142, November.
- Lucifora Claudio & Origo Federica, 1999. "Alla ricerca della flessibilità: un'analisi della curva dei salari in Italia," Rivista italiana degli economisti, Società editrice il Mulino, issue 1, pages 3-36.
- Blanchflower, D. & Oswald, A., 1989.
"The Wage Curve,"
340, London School of Economics - Centre for Labour Economics.
- Faggio, Guilia & Nickell, Stephen, 2005. "The responsiveness of wages to labour market conditions in the UK," Labour Economics, Elsevier, vol. 12(5), pages 685-696, October.
- Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June.
- Chiarini, Bruno & Piselli, Paolo, 1997. "Wage Setting, Wage Curve and Phillips Curve: The Italian Evidence," Scottish Journal of Political Economy, Scottish Economic Society, vol. 44(5), pages 545-65, November.
- Silvia Fabiani & Alberto Locarno & Gian Paolo Oneto & Paolo Sestito, 1997. "NAIRU: Incomes Policy and Inflation," OECD Economics Department Working Papers 187, OECD Publishing.
- Peter Nijkamp & Jacques Poot, 2005.
"The Last Word on the Wage Curve?,"
Journal of Economic Surveys,
Wiley Blackwell, vol. 19(3), pages 421-450, 07.
- Moulton, Brent R, 1990. "An Illustration of a Pitfall in Estimating the Effects of Aggregate Variables on Micro Unit," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 334-38, May.
- David Card, 1995. "The Wage Curve: A Review," Journal of Economic Literature, American Economic Association, vol. 33(2), pages 285-299, June.
- Richard B. Freeman & Lawrence F. Katz, 1995. "Differences and Changes in Wage Structures," NBER Books, National Bureau of Economic Research, Inc, number free95-1, May.
- Salop, Steven C, 1979. "A Model of the Natural Rate of Unemployment," American Economic Review, American Economic Association, vol. 69(1), pages 117-25, March.
- Moulton, Brent R., 1986. "Random group effects and the precision of regression estimates," Journal of Econometrics, Elsevier, vol. 32(3), pages 385-397, August.
- Piero CASADIO & Maria LAMELAS & Giorgio RODANO, 2005. "Cambiamento istituzionale, salari e flessibilità: l’esperienza della concertazione in Italia," Rivista Internazionale di Scienze Sociali, Vita e Pensiero, Pubblicazioni dell'Universita' Cattolica del Sacro Cuore, vol. 113(2), pages 185-214.
When requesting a correction, please mention this item's handle: RePEc:zbw:zewdip:5495. 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: (ZBW - German National Library of Economics)
If references are entirely missing, you can add them using this form.