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Labour market hierarchies and the macro-economy – Do labour market dualities affect wage growth in Europe?

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  • Ramskogler, Paul

Abstract

The drivers of wage growth in Europe are insufficiently understood. I argue that the institutional structure of labour markets – particularly labour market dualities – improve our understanding of the determinants of wage growth. This also helps to understand the period of a secular decline in wage growth after the crisis. Using data for the member states of the EU from Q1 2004 to Q4 2016, I demonstrate that there is a negative effect of the incidence of temporary contracts on overall wage growth. Further, I am able to show that it has considerably increased since the global financial crisis.

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  • Ramskogler, Paul, 2021. "Labour market hierarchies and the macro-economy – Do labour market dualities affect wage growth in Europe?," Structural Change and Economic Dynamics, Elsevier, vol. 56(C), pages 154-165.
    • Handle: RePEc:eee:streco:v:56:y:2021:i:c:p:154-165
    DOI: 10.1016/j.strueco.2020.10.001
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    Cited by:

    1. Canale, Rosaria Rita & Liotti, Giorgio & Musella, Marco, 2022. "Labour market flexibility and workers’ living conditions in Europe," Structural Change and Economic Dynamics, Elsevier, vol. 62(C), pages 441-450.
    2. Brand, Claus & Obstbaum, Meri & Coenen, Günter & Sondermann, David & Lydon, Reamonn & Ajevskis, Viktors & Hammermann, Felix & Angino, Siria & Hernborg, Nils & Basso, Henrique & Hertweck, Matthias & Bi, 2021. "Employment and the conduct of monetary policy in the euro area," Occasional Paper Series 275, European Central Bank.
    3. Lehner, Lukas & Ramskogler, Paul & Riedl, Aleksandra, 2022. "Begging thy coworker – Labor market dualization and the slow-down of wage growth in Europe," INET Oxford Working Papers 2022-04, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.
    4. Benjamin Bittschi, 2023. "Lohnführerschaft in Österreich: Relikt der Vergangenheit oder sozialpartnerschaftlicher Dauerbrenner?," Wirtschaft und Gesellschaft - WuG, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik, vol. 49(2), pages 79-101.
    5. Cauvel, Michael & Pacitti, Aaron, 2022. "Bargaining power, structural change, and the falling U.S. labor share," Structural Change and Economic Dynamics, Elsevier, vol. 60(C), pages 512-530.

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    More about this item

    Keywords

    J31; J42; J82; Wage growth; Labour market duality; Dual labour market theory;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • J82 - Labor and Demographic Economics - - Labor Standards - - - Labor Force Composition

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