Bericht
Understanding low wage growth in the euro area and European countries
Despite notable improvements in the labour market since 2013, wage growth in the euro area was subdued and substantially overpredicted in 2013-17. This paper summarises the findings of an ESCB expert group on the reasons for low wage growth and provides comparable analyses on wage developments in the euro area as a whole and in individual EU countries. The paper finds that cyclical drivers, as captured by a standard Phillips curve, seem to explain much of the weakness in wage growth during this period, but not all of it. Going beyond the drivers included in standard Phillips curves, other factors are also found to have played a role, such as compositional effects, the possible non-linear reaction of wage growth to cyclical improvements, and structural and institutional factors. In order to increase the robustness of wage forecasts, the paper also proposes ready-to-use tools for cross-checking euro area wage growth forecasts based on wage Phillips curves. These are derived based on a comprehensive real-time forecast evaluation exercise
- ISBN
-
978-92-899-3873-0
- Language
-
Englisch
- Bibliographic citation
-
Series: ECB Occasional Paper ; No. 232
- Classification
-
Wirtschaft
Wages, Compensation, and Labor Costs: General
Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
Price Level; Inflation; Deflation
Business Fluctuations; Cycles
- Subject
-
Wages
business cycles
structural factors
forecasting
- Event
-
Geistige Schöpfung
- (who)
-
Nickel, Christiane
Bobeica, Elena
Koester, Gerrit
Lis, Eliza Magdalena
Porqueddu, Mario
- Event
-
Veröffentlichung
- (who)
-
European Central Bank (ECB)
- (where)
-
Frankfurt a. M.
- (when)
-
2019
- DOI
-
doi:10.2866/025300
- Handle
- Last update
-
10.03.2025, 11:42 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Bericht
Associated
- Nickel, Christiane
- Bobeica, Elena
- Koester, Gerrit
- Lis, Eliza Magdalena
- Porqueddu, Mario
- European Central Bank (ECB)
Time of origin
- 2019
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Low frequency determinants of inflation in the Euro area
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Real wages and local unemployment in the euro area
Real wages and local unemployment in the Euro area
Low inflation and monetary policy in the euro area
Macroeconomic implications of low inflation in the euro area
Low-frequency determinants of inflation in the euro area
Low inflation in the euro area: Causes and consequences