Misalignment of productivity and wages across regions? Evidence from Belgian matched panel data

Arbeitspapier

This paper is one of the first to estimate how the region in which an establishment is located affects its productivity, wage cost and cost competitiveness (i.e. its productivity-wage gap). To do so, we use detailed linked employer-employee panel data for Belgium and rely on methodological approaches from both Hellerstein and Neumark (1995) and Bartolucci (2014) to estimate dynamic panel data models at the establishment level. Our findings show that inter-regional differences in productivity and wages are significant but vanish almost totally, both in industry and services, when controlling for a wide range of covariates, establishment fixed effects and endogeneity. Thus, our results suggest that wage cost and productivity differentials are ceteris paribus relatively well aligned across regions.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: NBB Working Paper ; No. 300

Classification and Topics

• Classification: Wirtschaft ; Multiple or Simultaneous Equation Models: Panel Data Models; Spatio-temporal Models ; Human Capital; Skills; Occupational Choice; Labor Productivity ; Wage Level and Structure; Wage Differentials ; Real Estate Markets, Spatial Production Analysis, and Firm Location: General
• Subject: Regions ; productivity ; labour costs ; linked panel data

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Rycx, François ; Saks, Yves ; Tojerow, Ilan
• Event: Veröffentlichung
• (who): National Bank of Belgium
• (where): Brussels
• (when): 2016

Further information

• Handle: http://hdl.handle.net/10419/173756
• Last update: 10.03.2025, 11:42 AM CET