I build a dynamic stochastic general equilibrium model with search and matching frictions and two sectors in order to study the labour market effects of public sector employment and wages. Public sector wages plays an important role in achieving the efficient allocation. High wages induce too...

We present empirical evidence of the extent of wage rigidity in the euro area and European countries derived from longitudinal data on individuals. Wage rigidity is measured by the elasticity of individual real wages with respect to local unemployment. The results suggest that the elasticity is...

An important aspect of the impact of the economic crisis is how pay in the public sector responds - in the face not only of the evolution of pay in the private sector, but also extreme pressure on public spending (of which pay is a very large proportion) as fiscal deficits soar. What are the...

Public sector unionism grew rapidly during the late 1960s and early 1970s following the passage of state collective bargaining laws. During the last thirty years, public sector membership has grown at roughly the same rate as the overall workforce. This paper provides a descriptive overview of...

This paper uncovers evidence on the distribution of wages in Belarus in the second half of the 1990s. The returns to education and work experience are high and stable, which is atypical for a transition country. This might be due to the pervasive role of the state in fixing wages in the dominant...

On their intensive margins, firms in the British engineering industry adjusted to the severe falls in demand during the 1930s Depression by cutting hours of work. This provided an important means of reducing labour input and marginal labour costs, through movements from overtime to short-time...

The wage curve literature consistently finds a negative relationship between regional unemployment rates and regional wages; the most widely accepted theoretical explanations interpret the unemployment rate as a measure of job competition. This paper proposes new ways of measuring job...

In flow models of the labor market, wages are determined by negotiations between workers and employers on the surplus value of a realized match. From this perspective our study presents an econometric analysis of the influence of labor market flows on wage formation as alternative to the...

In the last decade we have seen extensive international research on the extent to which wages of individuals respond to changing local labour market conditions. For many countries and periods, an inverse relationship between wages and unemployment rates has been found. Following Blanchflower and...

This paper provides some evidence on the existence of the wage curve - the negative relationship between individual wages and the local unemployment rate - within a number of occupations. It exploits the Bank of Italy's Household Survey and draws data from 1977 to 2008. An occupation-level wage...