Labour Market Adjustments to Financing Conditions under Sectoral Rigidities in the Euro Area
Simon Savsek () and
Sebastian Weber ()
Open Economies Review, 2018, vol. 29, issue 4, 769-794
Abstract This paper analyses empirically the response of labour market indicators to changing financing conditions in a panel of 15 euro area countries from 1999Q1 to 2015Q4. Using a local projections approach, we estimate impulse responses of three margins of sectoral labour market adjustment – employment, hours worked and real wages. Consistent with recent results in the literature, we find contractionary financing shocks to depress all three indicators of the labour market. Furthermore, responses are asymmetric depending on the sign of the shock, different in magnitude depending on the sectoral composition, and sensitive to labour market institutions such as employment protection legislation and union density. Finally, labour market institutions seem to mainly affect the relative strength of the adjustment margins and not so much the overall response of the wage bill.
Keywords: Labour market institutions; Employment; Wages; Sectoral adjustment; Financing conditions; Local projections method (search for similar items in EconPapers)
JEL-codes: E24 E44 J31 L51 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed
Downloads: (external link)
http://link.springer.com/10.1007/s11079-018-9485-0 Abstract (text/html)
Access to full text is restricted to subscribers.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:kap:openec:v:29:y:2018:i:4:d:10.1007_s11079-018-9485-0
Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/11079/PS2
Access Statistics for this article
Open Economies Review is currently edited by G.S. Tavlas
More articles in Open Economies Review from Springer
Bibliographic data for series maintained by Sonal Shukla ().