Unemployment, long-term unemployment and the regional wage level : a wage curve estimate for western Germany using regional panel data

Abstract

"The standard approach used in estimating wage curves is an individual wage function which is augmented by the inclusion of regional unemployment rates. The different aggregation level results in the standard error of the unemployment rate being underestimated and the accuracy of the 'wage curve' being exaggerated. For this reason,in this paper wage curves are estimated on the basis of regional panel data, in which the aggregation problem does not occur. Hardly any empirical evidence is found for a wage curve in western Germany. In contrast, long-term unemployment, which is additionally taken included in the estimation, has a clearly negative influence on the regional wage level." (Author's abstract, IAB-Doku) ((en))

Cite article

Schwarze, J. (1996): Arbeitslosigkeit, Langzeitarbeitslosigkeit und das regionale Lohnniveau. Eine Lohnkurvenschätzung für Westdeutschland mit regionalen Paneldaten. In: Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Vol. 29, No. 3, p. 487-490.