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Wage developments and their determinants since the start of the pandemic

Author

Listed:
  • Bodnár, Katalin
  • Gonçalves, Eduardo
  • Gόrnicka, Lucyna
  • Koester, Gerrit

Abstract

This article discusses wage developments and the main factors that have influenced them since the start of the pandemic. First, it reviews developments in a broad range of wage measures for the euro area and discusses their current usefulness as signals of wage pressures. In this context, it illustrates how the growth of compensation per employee was adjusted for the impact of job retention schemes. Second, the article looks at how wage developments have differed across sectors, reflecting the heterogeneous impact of the pandemic shock. Finally, it discusses the impact of inflation on purchasing power of wage incomes and real wage costs in the euro area by examining developments in real consumer and producer wages for the economy as a whole and in its main sectors. JEL Classification: E24, E31, J30, J31, J38

Suggested Citation

  • Bodnár, Katalin & Gonçalves, Eduardo & Gόrnicka, Lucyna & Koester, Gerrit, 2023. "Wage developments and their determinants since the start of the pandemic," Economic Bulletin Articles, European Central Bank, vol. 8.
    • Handle: RePEc:ecb:ecbart:2023:0008:2
    Note: 2881411
    as

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    File URL: https://www.ecb.europa.eu//pub/economic-bulletin/articles/2023/html/ecb.ebart202208_02~2328747465.en.html
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    Citations

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    Cited by:

    1. Cardani, Roberta & Pfeiffer, Philipp & Ratto, Marco & Vogel, Lukas, 2023. "The COVID-19 recession on both sides of the Atlantic: A model-based comparison," European Economic Review, Elsevier, vol. 158(C).
    2. Di Nino, Virginia & Aprigliano, Valentina, 2024. "How income expectations adjust to inflation – a consumers’ expectations-revealed pass-through," Working Paper Series 2986, European Central Bank.

    More about this item

    Keywords

    consumer wages; COVID-19; producer wages; wage growth;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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