Wage Persistence and Labour Market Institutions: An Analysis of Young European Workers

António Menezes, Dario Sciulli () and José Vieira

No 2627, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper investigates the effects of labour market institutions on wage persistence among young European workers at the beginning of their careers. We use ECHP data from 1995 to 2001 for 13 EU countries and estimate a three-level random intercept probit model that allows for unobserved heterogeneity both at the individual and country level. Overall, we find that labour market institutions explain wage persistence. In particular, we find that a high level of employment protection legislation and a high level of bargaining centralization increase wage persistence.

Keywords: labour market institutions; unobserved heterogeneity; wage persistence (search for similar items in EconPapers)
JEL-codes: C23 J31 J5 (search for similar items in EconPapers)
Pages: 13 pages
Date: 2007-02
New Economics Papers: this item is included in nep-eec and nep-lab
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Published - published in: Applied Economics Letters, 2011, 18 (9), 823 - 828

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Journal Article: Wage persistence and labour market institutions: an analysis of young European workers (2011)
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