Abstract

http://ssrn.com/abstract=1809087
 
 

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New Evidence on the Dynamic Wage Curve for Western Germany: 1980-2004


Badi H. Baltagi


Syracuse University - Center for Policy Research

Uwe Blien


Institute for Employment Research (IAB); Institute for the Study of Labor (IZA)

Katja Wolf


Government of the Federal Republic of Germany - Institute for Employment Research (IAB)

March 1, 2008

Center for Policy Research Working Paper No. 103

Abstract:     
Blanchflower and Oswald (1994) reported that they have found an ‘empirical law of economics’ – the Wage Curve. Our paper reconsiders the western German Wage Curve using disaggregated regional data and is based on almost one million employees drawn from the Federal Employment Services of Germany over the period 1980-2004. We find that the wage equation is highly autoregressive but far from unit root. The unemployment elasticity is significant but relatively small: only between -0.02 and -0.04. We also check the sensitivity of this elasticity for different population groups (young versus old, men versus women, less educated versus highly educated, German native versus foreigner), confirming that it is stronger the weaker the bargaining power of the particular group.

Number of Pages in PDF File: 16

Keywords: Wage Curve, regional labour markets, Phillips curve, panel data

JEL Classification: J30, C23, R10

working papers series


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Date posted: April 16, 2011  

Suggested Citation

Baltagi, Badi H. and Blien, Uwe and Wolf, Katja, New Evidence on the Dynamic Wage Curve for Western Germany: 1980-2004 (March 1, 2008). Center for Policy Research Working Paper No. 103. Available at SSRN: http://ssrn.com/abstract=1809087 or http://dx.doi.org/10.2139/ssrn.1809087

Contact Information

Badi H. Baltagi (Contact Author)
Syracuse University - Center for Policy Research ( email )
Syracuse, NY 13244
United States
315-443-1630 (Phone)
315-443-1081 (Fax)
HOME PAGE: http://www.maxwell.syr.edu/cpr_about.aspx?id=6442451316
Uwe Blien
Institute for Employment Research (IAB) ( email )
Regensburger Str. 104
Nuremberg, 90478
Germany
Institute for the Study of Labor (IZA)
P.O. Box 7240
Bonn, D-53072
Germany
Katja Wolf
Government of the Federal Republic of Germany - Institute for Employment Research (IAB) ( email )
Regensburger Str. 104
Nuremberg, 90478
Germany
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