What Happened to Wage and Non-Employment Structures During the 'Dutch Employment Miracle'?

Abstract

The Netherlands have experienced an employment miracle since the 1980s. This note investigates what happened to the wage, unemployment, and non-employment structures between 1988 and 1998, when both unemployment and non-employment rates decreased markedly. Surprisingly, I find no significant changes in the wage structures, although there clearly was wage moderation on average. Although there have also been virtually no changes in the unemployment structure, the relative non-employment of older workers (due to incentives to retire) and men increased. Whereas supply effects and early retirement schemes can explain the constancy of the returns to age, the lack of an increase in the returns to education remains a puzzle in the face of well-documented skill-biased technological change in other major industrialised countries.

Keywords: Earnings, flexibility, labour

JEL Classification: J21, J31, J64