The increase in the real wages of British workers over the last one hundred years is often attributed to the growth in labour productivity, but this has rarely been confirmed. In the research reported here, this ascription is confronted with annual observations on wages and productivity spanning...

We challenge the view that Centrally Planned Economies functioned well until the early 1970s, delivering high economic growth and better living standards. Judged by real wages as the most widely used historical living standard indicator, only in the 1970s did Bulgarian living standards surpass...

In their 1993 book, Richard Vedder and Lowell Gallaway contend that US unemployment during the twentieth century can be largely explained by movements in the "adjusted real wage rate", that is, the real hourly wage rate divided by labor productivity. In particular, the authors suggest that...

Real wages in the European Union continued their decline in 2023-despite an acceleration in nominal wage growth and falling inflation rates. For the current year, there are tentative only signs of a slow recovery of the purchasing power of wages. A resumption of real wage growth would stabilize...

Why have the real (consumption) wages of U.S. workers risen since the nineteenth century? Some economists answer that increases in real wages have followed increases in labor productivity over time. In this paper, this hypothesized association is confronted with annual observations of changes in...

Do labour institutions influence how wages respond to the business cycle? Such responsiveness can then shape several economic outcomes, including unemployment. In this paper, we examine the role of two key labour market institutions - collective bargaining and temporary contracts - upon wage...

Do labour institutions influence how wages respond to the business cycle? Such responsiveness can then shape several economic outcomes, including unemployment. In this paper, we examine the role of two key labour market institutions - collective bargaining and temporary contracts - upon wage...

The world has experienced rapid productivity growth in the last three decades, but has this growth reflected in wages? In theory, under certain conditions, workers earn their marginal product so that productivity growth feeds into wages on a one-to-one basis. Given the contradictory literature,...

Im Zuge des russischen Angriffskriegs in der Ukraine und der damit verbundenen Folgen, wie der Unterbrechung von Lieferketten und hoher Preissteigerungsraten, waren in ganz Europa im Jahr 2022 die höchsten Arbeitskostenanstiege seit Beginn der 2000er Jahre und gleichzeitig massive...

Hundreds of articles have been written that include empirical estimates of the employment effects of minimum wages; however, many of these articles find statistically insignificant effects, some find significant negative effects, and a few find significantpositive effects. Most of these studies...

This article leverages uniquely abundant town-level data to examine spatial inequality in prices and wages during the First Globalisation. I build a new dataset on prices of traded and household goods, and wages of skilled and unskilled workers for a panel of 42 towns in Serbia, in the period...

This paper documents how the cyclicality of real wages has evolved over time and across different frequencies in the US. We use individual level data from the CPS to construct composition bias corrected wage series at a quarterly frequency. Utilizing continuous wavelet tools, we find that the...

Although the quantitative relationship between employment cyclicality and wage cyclicality is central for the dynamics of macroeconomic models, there is little empirical evidence on this topic. We use the German AWFP dataset to document that wage cyclicalities are very heterogeneous across...

This paper uses the European Jobs Monitor (2017) ‘jobs’ approach to examine the structural changes in employment and wages in Canada between 1997 and 2022. Changes in employment and real wages reveals a long-term pattern of upgrading, particularly after the 2008 financial crisis. There is...

Low-skilled workers are concentrated in sectors that experience fast productivity growth and yet their real wages have been stagnating. We document evidence from the U.S. to show the importance of sectoral reallocations. Key to our two-sector model is the fall in the relative price of the...

Typical measures of wages, such as average hourly earnings, fail to capture cyclicality in the effective cost of labor in the presence of (i) cyclical fluctuations in the quality of worker-firm matches, or (ii) wages being smoothed within employment matches. To address both concerns, we estimate...

We conduct Business Cycle Accounting analyses for both the Euro Area and the United States. If the observed changes in the factor income shares reflect the frictionless competitive adjustment of productive factors, then we find that the capital-efficiency wedge was the main force driving the...

Im Zuge des russischen Angriffskriegs in der Ukraine und der damit verbundenen Folgen, wie der Unterbrechung von Lieferketten und hoher Preissteigerungsraten, waren in ganz Europa im Jahr 2022 die höchsten Arbeitskostenanstiege seit Beginn der 2000er Jahre und gleichzeitig massive...

With real wages falling by 4.0 % in 2022, workers in the European Union suffered an unprecedented loss in purchasing power. The reason for this was the rapid increase in consumer prices, behind which nominal wage growth fell significantly. Meanwhile, inflation is no longer driven by energy...

This work investigates the relationship between labor productivity (LP), real wage (RW), and employment (EMP). The paper's main goal is to test competing theories of growth and income distribution. Standard theory predicts that RW should increase following increases in LP. Alternative theories...

Low-skilled workers are concentrated in sectors that experience fast productivity growth and yet their real wages have been stagnating. We document evidence from the U.S. to show the importance of sectoral reallocations. Key to our two-sector model is the fall in the relative price of the...

We develop a new measure of wage rigidity, the Nash wage elasticity (NWE). The NWE is the percentage change in the actual wage rate when the wage that would occur under Nash bargaining changes by 1%. We show that the NWE can be measured from aggregate data under relatively weak assumptions which...

The nature of the non accelerating inflation rate of unemployment is analysed. The focus of our analysis is the role of aggregate demand and capacity in the context of the NAIRU. Two aspects of the relationship between the level of aggregate demand and the NAIRU are of particular significance....

This short note shows that accounting for capital adjustment is critical when analyzing the long-run effects of trade wars on real wages and consumption. The reason is that trade wars increase the relative price between investment goods and labor by taxing imported investment goods and their...

This study empirically investigates the relationship between labor productivity, average real wage, and employment. The paper's main goal is to provide a test of competing theories of growth and income distribution. Standard theory predicts that real wages should increase following increases in...

We show that cyclical variation in entry wages is driven by occupation mobility. To this end, we use Portuguese administrative data from 1986-2019 that accurately identifies occupation transitions between and within firms. We find that wages of new hires that remain in the same occupation are no...

Average wage growth is closely related to aggregate productivity growth across countries and within countries over time. The commonality of patterns across OECD countries suggests that common factors are at work. Are productivity-based explanations of wage changes consistent with increasing...