Current wage pressures in some EU countries

Working Papers 230 Pekka Sauramo

This paper is concerned with current wage pressures in 14 EU countries. Wage pressures are analysed by studying simultaneously past and recent changes in unemployment and functional distribution of income. The quantification of current wage pressures is based on the estimation of wage curves and dynamic wage equations. According to the results of the analysis, upward wage pressures – interpreted as wage increases that lead to an increase in the wage share – are strongest in Italy and Spain. In Germany there are upward pressures but not as strong as in these countries. Portugal is the best example of a country where there is strong pressure for wage moderation. The results support the view that, for the macroeconomic stability of the euro area, it is desirable that in the near future nominal wages in Germany rise faster than in recent years.

Keywords: Wages, functional distribution of income, unemployment
Published: 1.4.2007
JEL: E24, E25
ISBN: 978-952-209-042-3
ISSN: 1795-1801
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