Nominal Wage Rigidity and the Rate of Inflation

Using the accurate and extensive data available in the UK New Earnings Survey, this paper investigates the extent to which nominal wages are downwardly rigid and whether such rigidity interferes with necessary real wage adjustments when inflation is low. Despite the substantial numbers of individuals whose nominal wages fall from one year to the next, we find that if long-run inflation is one percent higher, the number of individuals with negative real pay growth increases by around 1.4 percent. This is controlling for the median and dispersion of the real wage change distribution.Inflation, Wage Rigidity

Wage Equations, Wage Curves and All That

This paper is concerned with the relationship between wages and unemployment. Using UK regions and individuals as the basis for our analysis, the following questions are investigated. First, is the wage equation a relationship between unemployment and wages or wage changes? Second, can we identify the relationship completely by looking at regional wages and regional unemployment or do regional wages depend on aggregate unemployment as well? Third, are wages influenced only by the current state of the labour market or do contracts lead to wages depending on labour market conditions in the last boom or upon entry into the job? Finally is the wage-unemployment relationship influenced by inflation, competition or the housing market?Wages, unemployment

The Beveridge Curve, Unemployment and Wages in the OECD from the 1960s to the 1990s - Preliminary Version

This paper is an empirical analysis of unemployment patterns in the OECD countries from the 1960s to the 1990s, looking at the Beveridge Curves, real wages as well as unemployment directly. Our results indicate the following. First, the Beveridge Curves of all the countries except Norway and Sweden shifted to the right from the 1960s to the early/mid 1980s. At this point, the countries divide into two distinct groups. Those whose Beveridge Curves continued to shift out and those where they started to shift back. Second, we find evidence that these movements in the Beveridge Curves may be partly explained by changes in labour market institutions, particularly those which are important for search and matching efficiency. Third, labour market institutions impact on real labour costs in a fashion which is broadly consistent with their impact on unemployment. Finally, broad movements in unemployment across the OECD can be explained by shifts in labour market institutions although this explanation relies on high levels of endogenous persistence as reflected in a lagged dependent variable coefficient of around 0.9.Beveridge Curve, labour market rigidities, unemployment rates, wage determination

Why do jobless rates differ?

Arbeitslosigkeit, Lohnrigidität, Lohnpolitik, Arbeitsmarkt, OECD-Staaten, Unemployment, Wage rigidity, Wage policy, Labour market, OECD countries

A new measure of skills mismatch: theory and evidence from the Survey of Adult Skills (PIAAC) *

Abstract This paper proposes a new measure of skills mismatch that combines information about skill proficiency, self-reported mismatch and skill use. The theoretical foundations underling this measure allow identifying minimum and maximum skill requirements for each occupation and to classify workers into three groups, the well-matched, the under-skilled and the over-skilled. The availability of skill use data further permit the computation of the degree of under and over-usage of skills in the economy. The empirical analysis is carried out using the first wave of the OECD Survey of Adult Skills (PIAAC), allowing comparisons across skill domains, labor market statuses and countries. * We would like to than

Apprenticeship, Vocational Training and Early Labor Market Outcomes - In East and West Germany

We study the returns to apprenticeship and vocational training for three early labor market outcomes all measured at age 25 for East and West German youths: non-employment (i.e., unemployment or out of the labor force), permanent fulltime employment, and wages. We find strong positive effects of apprenticeship and vocational training. There are no significant differences for different types of vocational training, minor differences between East and West Germany and males and females, and no significant changes in the returns over time. Instrumental variable estimations confirm the regression results. The positive returns hold up even in poor labor market situations

A picture of job insecurity facing British men

This paper considers three aspects of the job insecurity facing British men in the last two decades. The probability of becoming unemployed, the costs of unemployment in terms of real wages losses and the probability that the continuously employed will experience substantial real wage losses. The first of these has not risen in the last two decades, the second has risen by around 50 percent and the third has risen, particularly for the top skill groups

Wage equations, wage curves and all that

This paper is concerned with the relationship between wages and unemployment. Using UK regions and individuals as the basis for our analysis, the following questions are investigated. First, is the wage equation a relationship between unemployment and wages or wage changes? Second, can we identify the relationship completely by looking at regional wages and regional unemployment or do regional wages depend on aggregate unemployment as well? Third, are wages influenced only by the current state of the labour market or do contracts lead to wages depending on labour market conditions in the last boom or upon entry into the job? Finally is the wage-unemployment relationship influenced by inflation, competition or the housing market