The Role of Wage and Skill Differences in US-German Employment Differences

Richard Freeman and Ronald Schettkat

No 7474, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Greater job creation in the US than in Germany has often been related to greater wage dispersion coupled with less regulated labour and product markets in the US. Based on the Comparative German American Structural Database and the International Adult Literacy Survey we find that employment of skilled to unskilled labour is unrelated to differences in skill premium but that changes in relative employment are related to changes in relative wages raising the possibility of some substitution behavior. Still, the differing dispersion of wages is not a major contributor to differences in employment rates. The jobs problem in Germany is one of a general lack in demand for labor.

JEL-codes: E24 J23 (search for similar items in EconPapers)
Date: 2000-01
New Economics Papers: this item is included in nep-lab
Note: LS
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Citations: View citations in EconPapers (29)

Published as Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), vol. 219/1-2 (July 1999): 49-66

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