EMPLOYMENT BY SECTOR, PRODUCTIVITY AND WAGES IN 5 EUROPEAN COUNTRIES, 1965-2015: FIFTY YEARS OF EVOLUTION IN GERMANY, SPAIN, FRANCE, ITALY AND UK
Maria-Carmen Guisan () and
Applied Econometrics and International Development, 2017, vol. 17, issue 2, 33-46
We analyze the evolution of employment by sector, production and wages in 5 European countries for a period of fifty years (1965-2015). We have estimated the elasticities Employment/Output with a model in levels (by LS and GLS) and a mixed dynamic model (by LS). The elasticity estimated in the model in levels by GLS and in the mixed dynamic model by LS show values around 0.37 for Agriculture, 0.21 for Industry, around 0.41 for Building and higher than 0.70 for Services. The main effect of industrial development has been the creation of millions of employments on Services, as well as the increase on labour productivity and average real wage of these economies. The results are a strong support to Kaldor´s views. Regarding wages the evolution has been positive, but less than expected by workers due to the effects of some economic policies, without enough support to industry. There was a diminution of the ratio Wage/Productivity from nearly 0.70 in year 1975 to approximately 0.60 in year 2012. We strongly recommend economic changes in European industrial policies addressed to foster economic development and increasing levels of real wages. The comparison of average real wages of these European countries with the United States show a gap, favourable to the U.S. if the comparison is made with Exchange Rates and that both average values are very alike if the comparison is made with Purchasing Power Parities (PPPs).
Keywords: Employment by sector; Econometric Models; Estimation of Elasticity Labor/Output; Kaldor; Productivity; Wages; Europe; Germany; Spain; France; Italy; UK; European Economic Policy; Industry. (search for similar items in EconPapers)
JEL-codes: C51 E20 E24 J2 J3 L6 L7 L8 N34 O52 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eaa:aeinde:v:17:y:2017:i:2_3
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