Wage Rigidities in Western Germany? Microeconometric Evidence from the 1990s

65 Pages Posted: 20 Aug 2001

See all articles by Patrick A. Puhani

Patrick A. Puhani

Leibniz Universität Hannover; University of St. Gallen - Swiss Institute for International Economics and Applied Economic Research; IZA Institute of Labor Economics; Université Paris II - Panthéon-Assas

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Date Written: July 2001

Abstract

This paper investigates whether and in what sense the west German wage structure has been "rigid" in the 1990s. To test the hypothesis that a rigid wage structure has been responsible for rising low-skilled unemployment, I propose a methodology which makes less restrictive identifying assumptions than some previous related work. I find that the relative stability of educational wage premia was justified by market forces. However, relative wages did not respond to negative net demand shocks for young workers, as well as white-collar workers.

Keywords: Wages, Unemployment, Rigidities, Identification, Germany

JEL Classification: J31, J64

Suggested Citation

Puhani, Patrick A., Wage Rigidities in Western Germany? Microeconometric Evidence from the 1990s (July 2001). Available at SSRN: https://ssrn.com/abstract=278520 or http://dx.doi.org/10.2139/ssrn.278520

Patrick A. Puhani (Contact Author)

Leibniz Universität Hannover ( email )

Institut für Arbeitsökonomik
Koenigsworther Platz 1
30167 Hannover, DE 30167
Germany

University of St. Gallen - Swiss Institute for International Economics and Applied Economic Research ( email )

Dufourstr. 48
St. Gallen, 9000
Switzerland
+41 71 224 2341 (Phone)
+41 71 224 2298 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Université Paris II - Panthéon-Assas

12 place du Pantheon
Paris cedex 06, 75231
France

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